10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark one)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2018

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

Commission File Number: 0-15535

LAKELAND INDUSTRIES, INC.

(Exact name of Registrant as specified in its charter)

Delaware	13-3115216 .
(State of incorporation)	(IRS Employer Identification Number)

3555 Veterans Memorial Highway, Suite C, Ronkonkoma, New York	11779 .
(Address of principal executive offices)	(Zip Code)

(631) 981-9700

(Registrant's telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, smaller reporting company, or an emerging growth company. See the definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12-b-2 of the Exchange Act. Check one.

Large accelerated filer	¨
Accelerated filer	x
Nonaccelerated filer	¨ (Do not check if a smaller reporting company)
Smaller reporting company	¨
Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12-b-2 of the Exchange Act).     Yes¨ No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at June 5, 2018
Common Stock, $0.01 par value per share	8,116,199 shares

LAKELAND INDUSTRIES, INC.

AND SUBSIDIARIES

FORM 10-Q

The following information of the Registrant and its subsidiaries is submitted herewith:

		Page
PART I - FINANCIAL INFORMATION:
Item 1.	Financial Statements (Unaudited)
Introduction		3
	Condensed Consolidated Statements of Operations Three Months Ended April 30, 2018 and 2017	5
	Condensed Consolidated Statements of Comprehensive Income  Three Months Ended April 30, 2018 and 2017	6
	Condensed Consolidated Balance Sheets April 30, 2018 and January 31, 2018	7
	Condensed Consolidated Statements of Cash Flows Three Months Ended April 30, 2018 and 2017	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	30
Item 4.	Controls and Procedures	32
PART II - OTHER INFORMATION:
Item 6.	Exhibits	32
Signature Pages		33

LAKELAND INDUSTRIES, INC.

AND SUBSIDIARIES

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

Introduction

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Form 10-Q may contain certain forward-looking statements. When used in this Form 10-Q or in any other presentation, statements which are not historical in nature, including the words “anticipate,” “estimate,” “should,” “expect,” “believe,” “intend,” “project” and similar expressions, are intended to identify forward-looking statements. They also include statements containing a projection of sales, earnings or losses, capital expenditures, dividends, capital structure or other financial terms.

The forward-looking statements in this Form 10-Q are based upon our management’s beliefs, assumptions and expectations of our future operations and economic performance, taking into account the information currently available to us. These statements are not statements of fact. Forward-looking statements involve risks and uncertainties, some of which are not currently known to us that may cause our actual results, performance or financial condition to be materially different from the expectations of future results, performance or financial condition we express or imply in any forward-looking statements. Some of the important factors that could cause our actual results, performance or financial condition to differ materially from expectations are:

· our ability to obtain additional funds, if necessary;

· we are subject to risk as a result of our international manufacturing operations;

· there is no assurance that the new manufacturing facilities being built in Vietnam and India will be successfully completed or run in a profitable manner;

· our results of operations could be negatively affected by potential fluctuations in foreign currency exchange rates;

· we deal in countries where corruption is an obstacle;

· there is no assurance that our disposition of our Brazilian subsidiary will be entirely successful in that we may continue to be exposed to certain liabilities in connection with the operations of such company. In addition, while the Company’s tax advisors believe that the worthless stock deduction taken by the Company in connection therewith is valid, there can be no assurance that the IRS will not challenge it and, if challenged, that the Company will prevail.

· we are exposed to tax expense risk;

· rapid technological change could negatively affect sales of our products, inventory levels and our performance;

· we must estimate customer demand because we do not have long-term commitments from many of our customers, and errors in our estimates could negatively impact our inventory levels and net sales;

· our operations are substantially dependent upon key personnel;

· we rely on a limited number of suppliers and manufacturers for specific fabrics, and we may not be able to obtain substitute suppliers and manufacturers on terms that are as favorable, or at all, if our supplies are interrupted;

· our inability to protect our intellectual property;

· cybersecurity incidents could disrupt business operations, result in the loss of critical and confidential information and adversely impact our reputation and result of operations;

· we face competition from other companies, a number of which have substantially greater resources than we do;

· a substantial amount of our sales are to foreign buyers, which exposes us to additional risks;

· a significant reduction in government funding for preparations for terrorist incidents could adversely affect our net sales;

· environmental laws and regulations may subject us to significant liabilities;

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· our directors and executive officers have the ability to exert significant influence on us and on matters subject to a vote of our stockholders;

· our failure to realize anticipated benefits from acquisitions, divestitures or restructurings, or the possibility that such acquisitions, divestitures or restructurings could adversely affect us;

· covenants in our credit facilities may restrict our financial and operating flexibility;

· our ability to make payments on our indebtedness and comply with the restrictive covenants therein;

· the other factors referenced in this Form 10-Q, including, without limitation, in the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the factors described under “Risk Factors” disclosed in our fiscal 2018 Form 10-K.

We believe these forward-looking statements are reasonable; however, you should not place undue reliance on any forward-looking statements, which are based on current expectations. Furthermore, forward-looking statements speak only as of the date they are made. We undertake no obligation to publicly update or revise any forward-looking statements after the date of this Form 10-Q, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this Form 10-Q might not occur. We qualify any and all of our forward-looking statements entirely by these cautionary factors.

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LAKELAND INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

($000’s except for share and per share information)

	Three Months Ended April 30,
	2018			2017
Net sales	$	24,344		$	22,961
Cost of goods sold		14,840			14,403
Gross profit		9,504			8,558
Operating expenses		7,088			6,085
Operating profit		2,416			2,473
Other income (expense), net		(1	)		2
Interest expense		31			76
Income before taxes		2,384			2,399
Income tax expense		517			688
Net income	$	1,867		$	1,711
Net income per common share:
Basic	$	0.23		$	0.24
Diluted	$	0.23		$	0.23
Weighted average common shares outstanding:
Basic		8,116,199			7,263,774
Diluted		8,160,380			7,353,660

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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LAKELAND INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

($000’s)

	Three Months Ended April 30,
	2018			2017
Net income	$	1,867		$	1,711
Other comprehensive loss:
Foreign currency translation adjustments		(203	)		(90	)
Comprehensive income	$	1,664		$	1,621

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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LAKELAND INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(000’s except for share information)

	April 30,			January 31,
	2018			2018
ASSETS
Current assets
Cash and cash equivalents	$	16,285		$	15,788
Accounts receivable, net of allowance for doubtful accounts of $440 and $480 at April 30, 2018 and January 31, 2018, respectively		14,578			14,119
Inventories, net of allowance of $2,445 and $2,422 at April 30, 2018 and January 31, 2018, respectively		44,411			42,919
Prepaid VAT tax		1,903			2,119
Other current assets		2,237			1,555
Total current assets		79,414			76,500
Property and equipment, net		8,821			8,789
Assets held for sale		150			150
Deferred income tax		7,369			7,557
Prepaid VAT and other taxes		305			310
Other assets		342			354
Goodwill		871			871
Total assets	$	97,272		$	94,531
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	7,844		$	7,057
Accrued compensation and benefits		1,708			1,771
Other accrued expenses		1,486			1,182
Current maturity of long-term debt		158			158
Short-term borrowings		177			211
Total current liabilities		11,373			10,379
Long-term portion of debt		1,273			1,312
Total liabilities		12,646			11,691
Commitments and contingencies
Stockholders’ equity
Preferred stock, $0.01 par; authorized 1,500,000 shares (none issued)		—			—
Common stock, $.01 par; authorized 10,000,000 shares, Issued 8,472,640 shares; outstanding 8,116,199 shares		85			85
Treasury stock, at cost; 356,441 shares		(3,352	)		(3,352	)
Additional paid-in capital		75,038			74,917
Retained earnings		14,709			12,841
Accumulated other comprehensive loss		(1,854	)		(1,651	)
Total stockholders' equity		84,626			82,840
Total liabilities and stockholders' equity	$	97,272		$	94,531

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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LAKELAND INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

($000)’s

	For the Three Months Ended April 30,
	2018			2017
Cash flows from operating activities:
Net income	$	1,867		$	1,711
Adjustments to reconcile net income to net cash provided by operating activities
Provision for inventory obsolescence		23			223
Recovery of doubtful accounts		(40	)		(78	)
Deferred income taxes		188			305
Depreciation and amortization		187			186
Stock based and restricted stock compensation		119			99
Loss on disposal of property and equipment		5			—
(Increase) decrease in operating assets
Accounts receivable		(499	)		(1,891	)
Inventories		(1,603	)		3,233
Prepaid VAT tax		216			159
Other current assets		(699	)		50
Increase (decrease) in operating liabilities
Accounts payable		847			241
Accrued expenses and other liabilities		270			69
Net cash used by the sale of Brazil		—			(38	)
Net cash provided by operating activities		881			4,269
Cash flows from investing activities:
Purchases of property and equipment		(272	)		(141	)
Cash flows from financing activities:
Net repayments under revolving credit facility		—			(2,502	)
Loan repayments, long-term		(39	)		(6	)
Loan repayments, short-term		(61	)		(18	)
Loan borrowings, short-term		207			—
UK repayments under line of credit facility, net		(179	)		(125	)
Shares returned to pay employee taxes under restricted stock program		—			(1	)
Net cash used in financing activities		(72	)		(2,652	)
Effect of exchange rate changes on cash and cash equivalents		(40	)		7
Net increase in cash and cash equivalents		497			1,483
Cash and cash equivalents at beginning of period		15,788			10,365
Cash and cash equivalents at end of period	$	16,285		$	11,848
Supplemental disclosure of cash flow information:
Cash paid for interest	$	31		$	76
Cash paid for taxes	$	303		$	384

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Lakeland Industries, Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. Business

Lakeland Industries, Inc. and Subsidiaries (“Lakeland,” the “Company,” “we,” “our” or “us”), a Delaware corporation organized in April 1986, manufactures and sells a comprehensive line of safety garments and accessories for the industrial protective clothing market.

2. Basis of Presentation

The unaudited condensed consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission, and reflect all adjustments (consisting of only normal and recurring adjustments) which are, in the opinion of management, necessary to present fairly the unaudited condensed consolidated financial information required herein. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted pursuant to such rules and regulations. While we believe that the disclosures are adequate to make the information presented not misleading, it is suggested that these unaudited condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission for the fiscal year ended January 31, 2018.

The results of operations for the three month period ended April 30, 2018 are not necessarily indicative of the results to be expected for the full year.

In this Form 10-Q, (a) “FY means fiscal year; thus for example, FY19 refers to the fiscal year ending January 31, 2019, (b) “Q” refers to quarter; thus, for example, Q1 FY19 refers to the first quarter of the fiscal year ending January 31, 2019, (c) “Balance Sheet” refers to the unaudited condensed consolidated balance sheet and (d) “Statement of Operations” refers to unaudited condensed consolidated statement of operations.

3. Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated.

Use of Estimates and Assumptions

The preparation of the unaudited condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the balance sheet date, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. It is reasonably possible that events could occur during the upcoming year that could change such estimates.

Accounts Receivable, net

Trade accounts receivable are stated at the amount the Company expects to collect. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company recognizes losses when information available indicates that it is probable that a receivable has been impaired based on criteria noted in this paragraph at the date of the consolidated financial statements, and the amount of the loss can be reasonably estimated. Management considers the following factors when determining the collectability of specific customer accounts: Customer creditworthiness, past transaction history with the customers, current economic industry trends, changes in customer payment terms. Past due balances over 90 days and other less creditworthy accounts are reviewed individually for collectability. If the financial condition of the Company’s customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. Based on management’s assessment, the Company provides for estimated uncollectible amounts through a charge to earnings and a credit to a valuation allowance. Balances that remain outstanding after the Company has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable.

Inventories, net

Inventories include freight-in, materials, labor and overhead costs and are stated at the lower of cost (on a first-in, first-out basis) or net realizable value. Provision is made for slow-moving, obsolete or unusable inventory.

9

Impairment of Long-Lived Assets

The Company evaluates the carrying value of long-lived assets to be held and used when events or changes in circumstances indicate the carrying value may not be recoverable. The Company measures any potential impairment on a projected undiscounted cash flow method. Estimating future cash flows requires the Company’s management to make projections that can differ materially from actual results. The carrying value of a long-lived asset is considered impaired when the total projected undiscounted cash flows from the asset is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset.

Revenue Recognition

Substantially all of the Company’s revenue is derived from product sales, which consist of sales of the Company’s personal protective wear products to distributors. The Company considers purchase orders to be a contract with a customer. Contracts with customers are considered to be short-term when the time between order confirmation and satisfaction of the performance obligations is equal to or less than one year, and virtually all of the Company’s contracts are short-term. The Company recognizes revenue for the transfer of promised goods to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods. The Company typically satisfies its performance obligations in contracts with customers upon shipment of the goods. Generally, payment is due from customers within 30 to 90 days of the invoice date, and the contracts do not have significant financing components. The Company elected to account for shipping and handling activities as a fulfillment cost rather than a separate performance obligation. Shipping and handling costs associated with outbound freight are included in operating expenses, and for the quarters ended April 30, 2018 and 2017 aggregated approximately $0.6 million and $0.5 million, respectively. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenue.

The transaction price includes estimates of variable consideration, such as rebates, allowances, and discounts that are reductions in revenue. All estimates are based on the Company's historical experience, anticipated performance, and the Company's best judgment at the time the estimate is made. Estimates for variable consideration are reassessed each reporting period and are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur upon resolution of uncertainty associated with the variable consideration. All of the Company’s contracts have a single performance obligation satisfied at a point in time and the transaction price is stated in the contract, usually as quantity time’s price per unit.

The Company has five revenue generating reportable geographic segments under ASC Topic 280 “Segment Reporting” and derives its sales primarily from its limited use/disposable protective clothing and secondarily from its sales of reflective clothing, high-end chemical protective suits, firefighting and heat protective apparel, reusable woven garments and gloves and arm guards. The Company believes disaggregation of revenue by geographic region best depicts the nature, amount, timing, and uncertainty of its revenue and cash flows. Net sales by geographic region are included below:

	Three Months Ended
	April 30,
	(in millions of dollars)
	2018		2017
External Sales:
USA	$	12.35	$	12.70
Other foreign		4.35		3.70
Europe (UK)		2.57		2.09
Mexico		1.11		0.57
China		3.95		3.90
Consolidated external sales	$	24.34	$	22.96

Income Taxes

The Company is required to estimate its income taxes in each of the jurisdictions in which it operates as part of preparing the unaudited condensed consolidated financial statements. This involves estimating the actual current tax in addition to assessing temporary differences resulting from differing treatments for tax and financial accounting purposes. These differences, together with net operating loss carryforwards and tax credits, are recorded as deferred tax assets or liabilities on the Company’s unaudited condensed consolidated balance sheet. A judgment must then be made of the likelihood that any deferred tax assets will be recovered from future taxable income. A valuation allowance may be required to reduce deferred tax assets to the amount that is more likely than not to be realized. In the event the Company determines that it may not be able to realize all or part of its deferred tax asset in the future, or that new estimates indicate that a previously recorded valuation allowance is no longer required, an adjustment to the deferred tax asset is charged or credited to income in the period of such determination.

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The Company recognizes tax positions that meet a “more likely than not” minimum recognition threshold. If necessary, the Company recognizes interest and penalties associated with tax matters as part of the income tax provision and would include accrued interest and penalties with the related tax liability in the unaudited condensed consolidated balance sheets.

Foreign Operations and Foreign Currency Translation

The Company maintains manufacturing operations in Mexico, India, Argentina and the People’s Republic of China and can access independent contractors in China, Vietnam, Argentina and Mexico. It also maintains sales and distribution entities located in India, Canada, the U.K., Chile, China, Argentina, Russia, Kazakhstan and Mexico. The Company is vulnerable to currency risks in these countries. The functional currency for the United Kingdom subsidiary is the Euro; the trading company in China, the RMB; the Canadian Real Estate subsidiary, the Canadian dollar; the Russian operation, the Russian Ruble; the Kazakhstan operation the Kazakhstan Tenge and the Vietnam operation, the Vietnam Dong. All other operations have the US dollar as its functional currency.

Pursuant to US GAAP, assets and liabilities of the Company’s foreign operations with functional currencies, other than the US dollar, are translated at the exchange rate in effect at the balance sheet date, while revenues and expenses are translated at average rates prevailing during the periods. Translation adjustments are reported in accumulated other comprehensive loss, a separate component of stockholders’ equity. Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the unaudited condensed consolidated statement of cash flows will not necessarily agree with changes in the corresponding balances on the unaudited condensed consolidated balance sheet. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Foreign currency transaction losses included in net income for the three months ended April 30, 2018 was approximately $243,000 and for the three months ended April 30, 2017 was approximately $65,000.

Fair Value of Financial Instruments

US GAAP defines fair value, provides guidance for measuring fair value and requires certain disclosures utilizing a fair value hierarchy which is categorized into three levels based on the inputs to the valuation techniques used to measure fair value.

The following is a brief description of those three levels:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2:  Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3:  Unobservable inputs that reflect management’s own assumptions.

The financial instruments of the Company classified as current assets or liabilities, including cash and cash equivalents, accounts receivable, short-term borrowings, borrowings under revolving credit facility, accounts payable and accrued expenses, are recorded at carrying value, which approximates fair value based on the short-term nature of these instruments.

The Company believes that the fair values of its long-term debt approximates its carrying value based on the effective interest rate compared to the current market rate available to the Company.

Earnings Per Share

Basic earnings per share are based on the weighted average number of common shares outstanding without consideration of common stock equivalents. Diluted earnings per share are based on the weighted average number of common shares and common stock equivalents. The diluted earnings per share calculation takes into account unvested restricted shares and the shares that may be issued upon exercise of stock options, reduced by shares that may be repurchased with the funds received from the exercise, based on the average price during the period.

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Recent Accounting Pronouncements

The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued.

New Accounting Pronouncements Recently Adopted

In May 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting.” The amendment amends the scope of modification accounting for share-based payment arrangements, provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718. For all entities, the ASU is effective for annual reporting periods, including interim periods within those annual reporting periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period. The Company will apply the amendments in this update prospectively to an award modified on or after February 1, 2018 and does not expect that application of this guidance will have a material impact on its unaudited condensed consolidated financial statements and related disclosures.

As disclosed in Revenue Recognition above, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) effective February 1, 2018 using the retrospective transition method. This new accounting standard outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers. This standard supersedes existing revenue recognition requirements and eliminates most industry-specific guidance from US GAAP. The core principle of the new accounting standard is to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the adoption of this new accounting standard resulted in increased disclosure, including qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, the Company elected to account for shipping and handling activities as a fulfillment cost rather than a separate performance obligation. Adoption of this standard did not result in significant changes to the Company’s accounting policies, business processes, systems or controls, or have a material impact on the Company’s financial position, results of operations and cash flows or related disclosures. As such, prior period financial statements were not recast.

New Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). ASU 2016-02 requires lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early application is permitted for all entities. ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into after, the date of initial application, with an option to elect to use certain transition relief. The Company is currently evaluating the impact of this new standard on its unaudited condensed consolidated financial statements but has not determined the effects that the adoption of the pronouncement may have on its unaudited condensed consolidated financial statements and related disclosures.

In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income,” which allows institutions to elect to reclassify the stranded tax effects from AOCI to retained earnings, limited only to amounts in AOCI that are affected by the tax reform law. For public entities, the amendments are effective for annual reporting periods beginning after December 15, 2018, including interim reporting periods within that reporting period. For all other entities, the amendments in this Update are effective for annual reporting periods beginning after December 15, 2019, including interim reporting periods within that reporting period. The Company does not expect that adoption of this guidance will have a material impact on its unaudited condensed consolidated financial statements and related disclosures.

4. Inventories, net

Inventories, net consist of the following (in $000s):

	April 30, 2018		January 31, 2018
Raw materials	$	14,172	$	14,767
Work-in-process		2,235		2,357
Finished goods		28,004		25,795
	$	44,411	$	42,919

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5. Long-Term Debt

Revolving Credit Facility

On June 28, 2013, as amended on March 31, 2015 and June 3, 2015, the Company and its wholly owned Canadian subsidiary, Lakeland Protective Wear Inc. (collectively the “Borrowers”), entered into a Loan and Security Agreement (the “AloStar Loan Agreement”) with AloStar Business Credit, a division of AloStar Bank of Commerce (“AloStar”). The AloStar Loan Agreement provided the Borrowers with a $15 million revolving line of credit (the “AloStar Credit Facility”), at a variable interest rate based on LIBOR, with a first priority lien on substantially all of the United States and Canada assets of the Company, except for its Mexican plant and the Canadian warehouse.  After these amendments the maturity date of the AloStar Credit Facility was extended to June 28, 2017 and the minimum interest rate floor became 4.25% per annum. On May 10, 2017, the AloStar Loan Agreement was terminated, and the existing balance due was repaid with the proceeds from a new loan agreement with SunTrust Bank.

On May 10, 2017, the Company entered into a Loan Agreement (the “Loan Agreement”) with SunTrust Bank (“Lender”). The Loan Agreement provides the Company with a secured (i) $20.0 million revolving credit facility, which includes a $5.0 million letter of credit sub-facility, and (ii) $1,575,000 term loan with Lender. The Company may request from time to time an increase in the revolving credit loan commitment of up to $10.0 million (for a total commitment of up to $30.0 million). Borrowing pursuant to the revolving credit facility is subject to a borrowing base amount calculated as (a) 85% of eligible accounts receivable, as defined, plus (b) an inventory formula amount, as defined, minus (c) an amount equal to the greater of (i) $1,500,000 or (ii) 7.5% of the then current revolver commitment amount, minus (d) certain reserves as determined by the Loan Agreement. The credit facility matures on May 10, 2020 (subject to earlier termination upon the occurrence of certain events of default as set forth in the Loan Agreement). At the closing, the Company’s existing financing facility with AloStar was fully repaid and terminated using proceeds of the revolver in the amount of approximately $3.0 million.

Borrowings under the term loan and the revolving credit facility bear interest at an interest rate determined by reference whether the loan is a base rate loan or Eurodollar loan, with the rate election made by the Company at the time of the borrowing or at any time the Company elects pursuant to the terms of the Loan Agreement. The term loan is payable in equal monthly principal installments of $13,125 each, beginning on June 1, 2017, and on the first day of each succeeding month, with a final payment of the remaining principal and interest on May 10, 2020 (subject to earlier termination as provided in the Loan Agreement). For that portion of the term loan that consists of Eurodollar loans, the term loan shall bear interest at the LIBOR Market Index Rate (“LIBOR”) plus 2.0% per annum, and for that portion of the term loan that consists of base rate loans, the term loan shall bear interest at the base rate then in effect plus 1.0% per annum. All principal and unpaid accrued interest under the revolver credit facility shall be due and payable on the maturity date of the revolver. For that portion of the revolver loan that consists of Eurodollar loans, the revolver shall bear interest at LIBOR plus a margin rate of 1.75% per annum for the first six months and thereafter between 1.5% and 2.0%, depending on the Company’s “availability calculation” (as defined in the Loan Agreement) and, for that portion of the revolver that consists of base rate loans, the revolver shall bear interest at the base rate then in effect plus a margin rate of 0.75% per annum for the first six months and thereafter between 0.50% and 1.0%, depending on the availability calculation. As of the closing, the Company elected all borrowings under the Loan Agreement to accrue interest at LIBOR which, as of that date, was 0.99500%. As such, the initial rate of interest for the revolver is 2.745% per annum and the initial rate of interest for the term loan is 2.995% per annum. The Loan Agreement provides for payment of an unused line fee of between 0.25% and 0.50%, depending on the amount by which the revolving credit loan commitment exceeds the amount of the revolving credit loans outstanding (including letters of credit), which shall be payable monthly in arrears on the average daily unused portion of the revolver. There were no borrowings outstanding as of April 30, 2018 or at January 31, 2018.

The Company agreed to maintain a minimum “fixed charge coverage ratio” (as defined in the Loan Agreement) as of the end of each fiscal quarter, commencing with the fiscal quarter ended July 31, 2017, of not less than 1.10 to 1.00 during the applicable fiscal quarter, and agreed to certain negative covenants that are customary for credit arrangements of this type, including restrictions on the Company’s ability to enter into mergers, acquisitions or other business combination transactions, conduct its business, grant liens, make certain investments, incur additional indebtedness, and make stock repurchases.

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In connection with the Loan Agreement, the Company entered into a security agreement, dated May 10, 2017, with Lender pursuant to which the Company granted to Lender a first priority perfected security interest in substantially all real and personal property of the Company.

Borrowings in UK

On December 31, 2014, the Company and Lakeland Industries Europe, Ltd, (“Lakeland UK”), a wholly owned subsidiary of the Company, amended the terms of its existing line of credit facility with HSBC Bank to provide for (i) a one-year extension of the maturity date of the existing financing facility to December 19, 2016, (ii) an increase in the facility limit from £1,250,000 (approximately USD $1.9 million, based on exchange rates at time of closing) to £1,500,000 (approximately USD $2.3 million, based on exchange rates at time of closing), and (iii) a decrease in the annual interest rate margin from 3.46% to 3.0%. In addition, pursuant to a letter agreement dated December 5, 2014, the Company agreed that £400,000 (approximately USD $0.6 million, based on exchange rates at time of closing) of the note payable by the UK subsidiary to the Company shall be subordinated in priority of payment to the subsidiary’s obligations to HSBC under the financing facility. The balance under this loan outstanding at April 30, 2018 and January 31, 2018 was USD $0.0 million and USD $0.2 million, respectively. On December 31, 2016, Lakeland UK entered into an extension of the maturity date of its existing facility with HSBC Invoice Finance (UK) Ltd. to December 19, 2017. Other than the extension of the maturity date and a small reduction of the service charge from 0.9% to 0.85%, all other terms of the facility remained the same. On September 4, 2017 the facility was amended to include Algeria as an approved country. On December 4, 2017 the facility was extended to March 31, 2018 for the next review period and, as of March 9, 2018 the facility was extended to mature on March 31, 2019 with no additional changes to the terms.

Canada Loans

In September 2013, the Company refinanced its loan with the Development Bank of Canada (“BDC”) for a principal amount of approximately $1.1 million in both Canadian dollars and USD (based on exchange rates at time of closing). Such loan was for a term of 240 months at an interest rate of 6.45% per annum with fixed monthly payments of approximately USD $6,048 (CAD $8,169) including principal and interest. It was collateralized by a mortgage on the Company's warehouse in Brantford, Ontario. This loan was paid in full on September 26, 2017.

Argentina Loan

In April 2015, Lakeland Argentina S.R.L. (“Lakeland Argentina”), the Company’s Argentina subsidiary was granted a $300,000 line of credit denominated in Argentine pesos, pursuant to a standby letter of credit granted by the parent company. The line of credit outstanding at April 30, 2018, was approximately $177,000 as noted below.

The following three loans were made under the $300,000 facility stated above:

On July 1, 2016, Lakeland Argentina and Banco de la Nación Argentina (“BNA”) entered into an agreement for Lakeland Argentina to obtain a loan in the amount of ARS 569,000 (approximately USD $38,000, based on exchange rates at time of closing); such loan was for a term of one year at an interest rate of 27.06% per annum. This agreement was paid in full prior to January 31, 2018.

On May 19, 2017 Lakeland Argentina and BNA entered into an agreement for Lakeland Argentina to obtain a loan in the amount of ARS $1.8 million (approximately USD $112,000, based on exchange rates at time of closing); such loan is for a term of one year at an interest rate of 20.0% per annum. The amount outstanding at April 30, 2018 was ARS $0.2 million (approximately USD $7,000) which is included as short-term borrowings on the unaudited condensed consolidated balance sheet.)

On February 26, 2018 Lakeland Argentina and BNA entered into an agreement for Lakeland Argentina to obtain a loan in the amount of ARS $4.3 million (approximately USD $215,000, based on exchange rates at time of closing); such loan is for a term of one year at an interest rate of 32.0% per annum. The amount outstanding at April 30, 2018 was ARS $3.5 million (approximately USD $170,000) which is included as short-term borrowings on the unaudited condensed consolidated balance sheet.)

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Below is a table to summarize the debt amounts above (in 000’s):

	Short-Term				Long-term				Current Maturity of Long-term
	4/30/2018		1/31/2018		4/30/2018		1/31/2018		4/30/2018		1/31/2018
Argentina	$	177	$	31	$	—	$	—	$	—	$	—
UK		—		180		—		—		—		—
USA		—		—		1,273		1,312		158		158
Totals	$	177	$	211	$	1,273	$	1,312	$	158	$	158

Five-year Debt Payout Schedule

This schedule reflects the liabilities as of April 30, 2018, and does not reflect any subsequent event (in 000’s):

	Total		1 Year or less		2 Years		3 Years		4 Years		5 Years		After 5 Years
Borrowings in USA	$	1,431	$	158	$	158	$	1,115	$	—	$	—	$	—
Borrowings in Argentina		177		177		—		—		—		—		—
Total	$	1,608	$	335	$	158	$	1,115	$	—	$	—	$	—

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6. Concentration of Risk

Credit Risk

Financial instruments, which potentially subject the Company to concentration of credit risk, consist principally of cash and cash equivalents, and trade receivables. Concentration of credit risk with respect to trade receivables is generally diversified due to the large number of entities comprising the Company’s customer base and their dispersion across geographic areas. The Company routinely addresses the financial strength of its customers and, as a consequence, believes that its receivable credit risk exposure is limited. The Company does not require customers to post collateral.

The Company’s foreign financial depositories are Bank of America; China Construction Bank; Bank of China; China Industrial and Commercial Bank; HSBC; Rural Credit Cooperative of Shandong; Postal Savings Bank of China; Punjab National Bank; HSBC in India, Argentina and UK; Raymond James in Argentina; TD Canada Trust; Banco Itaú S.A., Banco Credito Inversione in Chile; Banco Mercantil Del Norte SA in Mexico; ZAO KB Citibank Moscow in Russia, and JSC Bank Centercredit in Kazakhstan. The Company monitors its financial depositories by their credit rating which varies by country. In addition, cash balances in banks in the United States of America are insured by the Federal Deposit Insurance Corporation subject to certain limitations. There is approximately $9.6 million total included in the US bank accounts and approximately $6.7 million total in foreign bank accounts as of April 30, 2018.

Major Customer

No customer accounted for more than 10% of net sales during the three month periods ended April 30, 2018 and 2017.

Major Supplier

No supplier accounted for more than 10% of purchases during the three month periods ended April 30, 2018 and 2017.

7. Stockholders’ Equity

The 2017, 2015 and 2012 Stock Plans

On June 21, 2017, the stockholders of the Company approved the Lakeland Industries, Inc. 2017 Equity Incentive Plan (the “2017 Plan”) at the Annual Meeting of Stockholders. The executive officers and all other employees and directors of the Company, including its subsidiaries are eligible to participate in the 2017 Plan. The 2017 Plan is administered by the Compensation Committee of the Board of Directors (the “Committee”), except that with respect to all non-employee directors, the Committee shall be deemed to include the full Board. The 2017 Plan provides for the grant of equity-based compensation in the form of stock options, restricted stock, restricted stock units, performance shares, performance units, or stock appreciation rights.

The Committee has the authority to determine the type of award, as well as the amount, terms and conditions of each award, under the 2017 Plan, subject to the limitations and other provisions of the 2017 Plan. An aggregate of 360,000 shares of the Company’s common stock are authorized for issuance under the 2017 Plan, subject to adjustment as provided in the 2017 Plan for stock splits, dividends, distributions, recapitalizations and other similar transactions or events. If any shares subject to an award are forfeited, expire, lapse or otherwise terminate without issuance of such shares, such shares shall, to the extent of such forfeiture, expiration, lapse or termination, again be available for issuance under the 2017 Plan. The following table summarizes the unvested shares granted on September 12, 2017, which have been made under the 2017 Plan.

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	Number of shares awarded total
	Minimum		Target		Maximum		Cap
Employees		21,145		31,718		42,291		50,748
Non-Employee Directors		7,246		10,870		14,493		17,391
Total		28,391		42,588		56,784		68,139

	Value at grant date (numbers below are rounded to the nearest $100)
	Minimum		Target		Maximum		Cap
Employees	$	291,800	$	437,700	$	583,600	$	700,300
Non-Employee Directors		100,000		150,000		200,000		240,000
Total	$	391,800	$	587,700	$	783,600	$	940,300

Of the total number of shares awarded at Maximum, there are an aggregate of 56,784 shares underlying restricted stock awards and in addition in the 2017 Plan there are 6,376 shares underlying awards of stock appreciation rights with a base price of $13.80 per share. These stock appreciation rights are classified as liability awards and are remeasured at fair value each reporting period until the award is settled. As of April 30, 2018 and January 31, 2018, the Company has recorded a liability in the amount of $0 and $1,913, respectively, related to these stock appreciation rights.

The actual number of shares of common stock of the Company, if any, to be earned by the award recipients is determined over a full three fiscal year performance period commencing on February 1, 2017 and ending on January 31, 2020, based on the level of earnings before interest, taxes, depreciation and amortization (“EBITDA”) achieved by the Company over this period. The EBITDA targets have been set for each of the Minimum, Target, Maximum and Cap levels, at higher amounts for each of the higher levels. The actual EBITDA amount achieved is determined by the Committee and may be adjusted for items determined to be unusual in nature or infrequent in occurrence, which items may include, without limitation, the charges or costs associated with restructurings of the Company or any subsidiary, discontinued operations, and the cumulative effects of accounting changes.

Under the 2017 Plan, as described above, the Company awarded performance-based restricted stock and stock appreciation rights to eligible employees and directors. Such awards were at either Minimum, Target, Maximum or Cap levels, based on three year EBITDA targets. The Company recognizes expense related to performance-based restricted share awards over the requisite performance period using the straight-line attribution method based on the most probable outcome (minimum, target, maximum, cap or zero) at the end of the performance period and the price of the Company’s common stock price at the date of grant. The Company is recognizing expense related to awards under the 2017 Plan at Maximum and these expenses were $65,824 for the three-month period ended April 30, 2018.

The 2017 Plan is the successor to the Lakeland Industries, Inc. 2015 Stock Plan (the “2015 Plan”). The executive officers and all other employees and directors of the Company and its subsidiaries were eligible to participate in the 2015 Plan. The 2015 Plan authorized the issuance of awards of restricted stock, restricted stock units, performance shares, performance units and other stock-based awards. The 2015 Plan also permitted the grant of awards that qualify for “performance-based compensation” within the meaning of Section 162(m) of the US Internal Revenue Code. The aggregate number of shares of the Company’s common stock that was issuable under the 2015 Plan was 100,000 shares. Under the 2015 Plan, as of April 30, 2018, there were 67,000 shares vested; of which 43,029 shares were issued and 23,971 shares were returned to the Company to pay employee taxes.

The 2015 Plan, was the successor to the Company’s 2012 Stock Incentive Plan (the “2012 Plan”). The Company’s 2012 Plan authorized the issuance of up to a maximum of 310,000 shares of the Company’s common stock to employees and directors of the Company and its subsidiaries in the form of restricted stock, restricted stock units, performance shares, performance units and other share-based awards. Under the 2012 Plan, as of April 30, 2018, the Company issued 293,887 fully vested shares of common stock, and at April 30, 2018, there are no outstanding shares to vest according to the terms of the 2012 Plan.

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Under the 2012 Plan and the 2015 Plan, the Company generally awarded eligible employees and directors with either performance-based or time-based restricted shares. Performance-based restricted shares were awarded at either baseline (target), maximum or zero amounts. The number of restricted shares subject to any award was not tied to a formula or comparable company target ranges, but rather was determined at the discretion of the Committee at the end of the applicable performance period, which was two years under the 2015 Plan and had been three years under the 2012 Plan. The Company recognized expense related to performance-based restricted share awards over the requisite performance period using the straight-line attribution method based on the most probable outcome (baseline, maximum or zero) at the end of the performance period and the price of the Company’s common stock price at the date of grant.

As of April 30, 2018, there was unrecognized stock-based compensation expense of $576,679 pursuant to the 2017 Plan based on the maximum performance award level. Such unrecognized stock-based compensation expense totaled $184,879 for the 2017 Plan at the minimum performance award level. The cost of these non-vested awards is expected to be recognized over a weighted-average period of three years for the 2017 Plan.

The Company recognized total stock-based compensation costs, which are reflected in operating expenses:

	Three Months Ended April 30,
	2018		2017
2012 Plan	$	—	$	206
2015 Plan		—		98,642
2017 Plan		119,240		—
Total stock-based compensation	$	119,240	$	98,848
Total income tax benefit recognized for stock-based compensation arrangements	$	25,040	$	35,585

Shares issued under 2017 Stock Plan	Outstanding Unvested Grants at Maximum at Beginning of FY19		Granted during FY18 through April 30, 2018		Becoming Vested during FY18 through April 30, 2018		Forfeited during FY18 through April 30, 2018		Outstanding Unvested Grants at Maximum at End of April 30, 2018
Restricted stock grants – employees		42,291		—		—		—		42,291
Restricted stock grants – non-employee directors		14,493		—		—		—		14,493
Retainer in stock – non-employee directors		12,789		5,328		—		—		18,117
Total restricted stock		69,573		5,328		—		—		74,901
Weighted average grant date fair value	$	13.63	$	12.95	$	—	$	—	$	13.58

Other Compensation Plans/Programs

Pursuant to the Company’s restrictive stock program, all directors are eligible to elect to receive any director fees in shares of restricted stock in lieu of cash. Such restricted shares are subject to a two-year vesting period. The valuation is based on the stock price at the grant date and is amortized to expense over the two-year period, which approximates the performance period. Since the director is giving up cash for unvested shares, and is subject to a vesting requirement, the amount of shares awarded is 133% of the cash amount based on the grant date stock price. As of April 30, 2018, unrecognized stock-based compensation expense related to these restricted stock awards totaled $39,987 for the 2017 Plan. The cost of these non-vested awards is expected to be recognized over a two-year weighted-average period. In addition, as of April 30, 2018 the Company granted awards for up to an aggregate 12,896 for the 2017 Plan.

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Stock Repurchase Program

On July 19, 2016, the Company’s board of directors approved a stock repurchase program under which the Company may repurchase up to $2,500,000 of its outstanding common stock. The Company has not repurchased any stock under this program as of the date of this filing.

Warrant

In October 2014, the Company issued a five-year warrant that is immediately exercisable to purchase up to 55,500 shares of the Company’s common stock at an exercise price of $11.00 per share. As of April 30, 2018 and January 31, 2018, the warrant to purchase up to 55,500 shares remains outstanding.

Shelf Registration

On March 24, 2017, the Company filed a shelf registration statement on Form S-3 (File No. 333-216943) which was declared effective by the SEC on April 11, 2017 (the “Shelf Registration Statement”). The Shelf Registration Statement permits the Company to sell, from time to time, up to an aggregate of $30.0 million of various securities, including shares of common stock, shares of preferred stock, debt securities, warrants to purchase common stock, preferred stock, debt securities, and/or units, rights to purchase common stock, preferred stock, debt securities, warrants and/or units, units of two or more of the foregoing, or any combination of such securities, not to exceed one-third of the Company's public float in any 12-month period.

Public Offering

On August 17, 2017, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Roth Capital Partners, LLC and Craig-Hallum Capital Group LLC, as underwriters (collectively, the “Underwriters”), to issue and sell 725,000 shares of common stock, par value $0.01 per share (“Common Stock”), of the Company at a public offering price of $13.80 per share (the “Offering Price”) in a firm commitment underwritten public offering (the “Offering”). The underwriting discount was $0.966 per share sold in the Offering. The Offering with respect to the sale of the 725,000 shares of Common Stock closed on August 22, 2017. Pursuant to the Underwriting Agreement, the Underwriters had the option, exercisable for a period of 45-days after execution of the Underwriting Agreement, to purchase up to an additional 108,750 shares of the Common Stock at the Offering Price. In September 2017, the Underwriters exercised their option to purchase 83,750 shares of Common Stock. The net proceeds to the Company from the Offering, including the overallotment, were approximately $10.1 million, after deducting underwriting discounts and estimated offering expenses payable by the Company.

The offer and sale of shares of Common Stock in the Offering have been registered under the Securities Act of 1933, as amended, pursuant to the Shelf Registration Statement. The offer and sale of the shares of Common Stock in the Offering are described in the Company’s prospectus constituting a part of the Shelf Registration Statement, as supplemented by a final prospectus supplement filed with the Commission on August 18, 2017.

8. Income Taxes

Change in Valuation Allowance

The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. The valuation allowance was $2.2 million at April 30, 2018 and January 31, 2018.

Income Tax Expense

Income tax expenses consist of federal, state and foreign income taxes. The statutory rate is the US rate. Reconciling items to the effective rate are foreign dividend income, foreign income subject to US tax, tax deductions for restricted stock vesting, company borrowing structures, and other permanent tax differences.

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Tax Reform

On December 22, 2017, new federal tax reform legislation was enacted in the United States, resulting in significant changes from previous tax law.  The 2017 Tax Cuts and Jobs Act (the Tax Act) reduced the federal corporate income tax rate to 21% from 35% effective January 1, 2018.  As a result of the Tax Act, the Company applied a blended US statutory federal income tax rate of 33.81% for the year ended January 31, 2018. The Tax Act requires the Company to recognize the effect of the tax law changes in the period of enactment, such as determining the transition tax (see below), re-measuring the Company’s US deferred tax assets as well as reassessing the net realizability of the Company’s deferred tax assets. The Company completed this re-measurement and reassessment in the most recently completed fiscal year.

The Company previously considered substantially all of the earnings in their non-US subsidiaries to be indefinitely reinvested outside the US and, accordingly, recorded no deferred income taxes on such earnings.  At this time, and until the Company fully analyzes the applicable provisions of the Tax Act, the intention with respect to unremitted foreign earnings is to continue to indefinitely reinvest outside the US those earnings needed for working capital or additional foreign investment. Apart from the transition tax, any incremental deferred income taxes on the unremitted foreign earnings and profits are not expected to be material.

While the Tax Act provides for a modified territorial tax system, beginning in the fiscal year ending January 31, 2019, it includes two new US tax base erosion provisions, the Global Intangible Low-Taxed Income (“GILTI”) provisions and the Base-Erosion and Anti-Abuse Tax (“BEAT”) provisions. The GILTI provisions require the Company to include in its US income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets. The Company does not expect that the GILTI income inclusion will result in significant US tax beginning in the current fiscal year ending January 31, 2019. The BEAT provisions in the Tax Act eliminates the deduction of certain base-erosion payments made to related foreign corporations and impose a minimum tax if greater than regular tax. The Company does not expect that the BEAT provision will result in significant US tax beginning in FY19. In addition, the Company intends to account for the GILTI tax in the period in which it is incurred, and therefore has not provided any deferred tax impacts of GILTI in its unaudited condensed consolidated financial statements for the quarter ended April 30, 2018.

9. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share at April 30, 2018 and 2017 as follows:

	Three Months Ended April 30, (in $000s except share and per share information)
	2018		2017
Numerator:
Net income	$	1,867	$	1,711
Denominator:
Denominator for basic earnings per share (weighted-average shares which reflect 356,441 shares in the treasury)		8,116,199		7,263,774
Effect of dilutive securities from restricted stock plan and from dilutive effect of stock options		44,181		89,886
Denominator for diluted earnings per share (adjusted weighted average shares)		8,160,380		7,353,660
Basic earnings per share	$	0.23	$	0.24
Diluted earnings per share	$	0.23	$	0.23

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10. Contingencies

Labor contingencies in Brazil

Lakeland and Lake Brasil Industria E Comercio de Roupas E Equipamentos de Protecao Individual LTDA (“Lakeland Brazil”), the Company’s former subsidiary, is currently named in four labor proceedings in Brazilian courts and, due to certain liability assumption provisions specified in the Shares Transfer Agreement.

The first case was initially filed in 2010 claiming US $100,000 owed to plaintiff. This case is on its final appeal to the Brazilian Supreme Court, having already been ruled upon in favor of Lakeland three times, most recently by the Labor Court Supreme Court. The claimant having lost four times previously, management firmly believes that Lakeland will continue to prevail in this case. A second case filed against Lakeland by a former principal in the Brazilian Company purchased by Lakeland, was filed in Labor court in 2014 claiming Lakeland owed US $300,000. The Labor court ruled last month that the claimant’s case was outside of the scope of the Labor court and the case was dismissed. The claimant is appealing within the Labor court system. A third case filed by a former Lakeland Brazil manager in 2014 was ruled upon in civil court and awarded the claimant US $100K. Both the claimant and Lakeland have appealed this decision.  In the last case a former employee of our former Brazilian subsidiary filed a claim seeking approximately US $700,000 that he alleges is due him against an unpaid promissory note. Management firmly believes these claims to be without any merit and does not anticipate a negative outcome resulting in significant expense to us. The Company recorded a liability totaling $150,000 in the fiscal year ended January 31, 2018 to reflect this contingency. The accrual on the balance sheet at April 30, 2018 is $0.15 million.

General litigation contingencies:

The Company is involved in various litigation proceedings arising during the normal course of business which, in the opinion of the management of the Company, will not have a material effect on the Company’s financial position, results of operations or cash flows; however, there can be no assurance as to the ultimate outcome of these matters. As of April 30, 2018, to the best of the Company’s knowledge, there were no outstanding claims or litigation, except for the labor contingencies in Brazil described above.

11. Segment Reporting

Domestic and international sales from continuing operations are as follows in millions of dollars:

	Three Months Ended April 30,
	2018				2017
Domestic	$	12.35	50.75	%	$	12.70	55.31	%
International		11.99	49.25	%		10.26	44.69	%
Total	$	24.34	100.00	%	$	22.96	100.00	%

The Company manages its operations by evaluating each of their geographic locations. The US operations include a facility in Alabama (primarily the distribution to customers of the bulk of our products and the light manufacturing of our chemical, wovens, reflective, and fire products). The Company also maintains one manufacturing company in China (primarily disposable and chemical suit production), a manufacturing facility in Mexico (primarily disposable, reflective, fire and chemical suit production) and a small manufacturing facility in India. The China facilities produce the majority of the Company’s products and China generates a significant portion of the Company’s international revenues. The Company evaluates the performance of these entities based on operating profit, which is defined as income before income taxes, interest expense and other income and expenses. The Company maintains sales forces in the USA, Canada, Mexico, Europe, Latin America, India, Russia, Kazakhstan and China, which sell and distribute products shipped from the United States, Mexico, India or China. The table below represents information about reported segments for the years noted therein:

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	Three Months Ended April 30, (in millions of dollars)
	2018			2017
Net Sales:
USA	$	13.31		$	13.40
Other foreign		5.11			4.05
Europe (UK)		2.57			2.13
Mexico		1.47			0.92
China		13.83			10.52
Corporate		0.36			0.42
Less intersegment sales		(12.32	)		(8.48	)
Consolidated sales	$	24.34		$	22.96
External Sales:
USA	$	12.35		$	12.70
Other foreign		4.35			3.70
Europe (UK)		2.57			2.09
Mexico		1.11			0.57
China		3.95			3.90
Consolidated external sales	$	24.34		$	22.96
Intersegment Sales:
USA	$	0.96		$	0.70
Other foreign		0.76			0.35
Europe (UK)		—			0.04
Mexico		0.36			0.35
China		9.88			6.62
Corporate		0.36			0.42
Consolidated intersegment sales	$	12.32		$	8.48
Operating Profit (Loss):
USA	$	2.63		$	2.26
Other foreign		0.57			0.43
Europe (UK)		0.09			0.07
Mexico		0.13			0.03
China		0.58			0.97
Corporate		(1.79	)		(1.38	)
Less intersegment profit		0.21			0.09
Consolidated operating profit	$	2.42		$	2.47
Depreciation and Amortization Expense:
USA	$	0.03		$	0.03
Other foreign		0.04			0.04
Mexico		0.03			0.03
China		0.05			0.06
Corporate		0.05			0.04
Less intersegment		(0.01	)		(0.01	)
Consolidated depreciation & amortization expense	$	0.19		$	0.19
Interest Expense:
Other foreign		0.02			0.02
China		—			—
Corporate		0.01			0.06
Consolidated interest expense	$	0.03		$	0.08
Income Tax Expense:
Other foreign		0.09			0.05
Europe (UK)		0.02			0.01
China		0.16			0.29
Corporate		0.19			0.32
Less intersegment		0.06			0.02
Consolidated income tax expense	$	0.52		$	0.69

22

	Three Months Ended April 30, (in millions of dollars)
Capital Expenditures:
USA	$	0.02		$	—
Mexico		0.08			0.01
China		0.18			0.02
India		0.04			—
Corporate		(0.05	)		0.11
Consolidated capital expenditures	$	0.27		$	0.14

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	April 30, 2018 (in millions of dollars)			January 31, 2018 (in millions of dollars)
Total Assets:*
USA	$	69.00		$	67.02
Other foreign		20.61			20.30
Europe (UK)		4.38			4.63
Mexico		5.66			4.69
China		31.86			31.59
India		(0.81	)		(0.85	)
Corporate		20.96			22.27
Less intersegment		(54.39	)		(55.12	)
Consolidated assets	$	97.27		$	94.53
Total Assets Less Intersegment:*
USA	$	34.72		$	33.16
Other foreign		13.14			12.61
Europe (UK)		4.39			4.63
Mexico		5.76			4.84
China		19.14			16.97
India		1.10			0.98
Corporate		19.02			21.34
Consolidated assets	$	97.27		$	94.53
Property and Equipment (excluding assets held for sale at $0.2 million):
USA	$	1.99		$	1.99
Other foreign		1.40			1.50
Europe (UK)		0.02			0.03
Mexico		2.05			1.99
China		2.03			1.92
India		0.18			0.15
Corporate		1.10			1.18
Less intersegment		0.05			0.03
Consolidated property and equipment	$	8.82		$	8.79
Goodwill:
USA	$	0.87		$	0.87
Consolidated goodwill	$	0.87		$	0.87

*Negative assets reflect intersegment amounts eliminated in consolidation

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Form 10-Q may contain certain “forward-looking” information within the meaning of the Private Securities Litigation Reform Act of 1995. This information involves risks and uncertainties. Our actual results may differ materially from the results discussed in the forward-looking statements. See “SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS” at the beginning of Part I, Item 1.

Overview

We manufacture and sell a comprehensive line of safety garments and accessories for the industrial and public protective clothing market. Our products are sold by our in-house, regional sales teams, our customer service group, and authorized independent sales representatives to a network of over 1,200 North American safety and mill supply distributors. These distributors in turn supply end user industrial customers, such as integrated oil, chemical/petrochemical, utilities, automobile, steel, glass, construction, smelting, munition plants, janitorial, pharmaceutical, mortuaries and high technology electronics manufacturers, as well as scientific and medical laboratories. In addition, we supply federal, state and local governmental agencies and departments, such as fire and law enforcement, airport crash rescue units, the Department of Defense, the Department of Homeland Security and the Centers for Disease Control. Internationally, sales are to a mixture of end users directly and to industrial distributors depending on the particular country and market. Sales are made to more than 40 countries, the bulk of which were into China, European Economic Community (“EEC”), Canada, Chile, Argentina, Russia, Kazakhstan, Colombia, Mexico, Ecuador and Southeast Asia.

We have operated facilities in Mexico since 1995 and in China since 1996. Beginning in 1995, we moved the labor intensive sewing operation for our limited use/disposable protective clothing lines to these facilities. Our facilities and capabilities in China and Mexico allow access to a less expensive labor pool than is available in the United States and permit us to purchase certain raw materials at a lower cost than they are available domestically. More recently we have initiated startup manufacturing operations in Vietnam (which is still under development) and India to offset increasing manufacturing costs in China. Our China operations will continue operations primarily manufacturing for the Chinese market and other markets where duty advantages exist. Manufacturing expansion is not only necessary to control rising costs, it is also necessary for Lakeland to achieve its growth objectives. Our net sales attributable to customers outside the United States were $12.0 million and $10.3 million for the three months ended April 30, 2018 and 2017, respectively.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of our unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, net sales and expenses and disclosure of contingent assets and liabilities. We base our estimates on the past experience and on various other assumptions that we believe to be reasonable under the circumstances, and we periodically evaluate these estimates.

We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our unaudited condensed consolidated financial statements.

Revenue Recognition. Substantially all of the Company’s revenue is derived from product sales, which consist of sales of the Company’s personal protective wear products to distributors. The Company considers purchase orders to be a contract with a customer. Contracts with customers are considered to be short-term when the time between order confirmation and satisfaction of the performance obligations is equal to or less than one year, and virtually all of the Company’s contracts are short-term. The Company recognizes revenue for the transfer of promised goods to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods. The Company typically satisfies its performance obligations in contracts with customers upon shipment of the goods. Generally, payment is due from customers within 30 to 90 days of the invoice date, and the contracts do not have significant financing components. The Company elected to account for shipping and handling activities as a fulfillment cost rather than a separate performance obligation. Shipping and handling costs associated with outbound freight are included in operating expenses, and for the quarters ended April 30, 2018 and 2017 aggregated approximately $0.6 million and $0.5 million, respectively. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenue.

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The transaction price includes estimates of variable consideration, such as rebates, allowances, and discounts that are reductions in revenue. All estimates are based on the Company's historical experience, anticipated performance, and the Company's best judgment at the time the estimate is made. Estimates for variable consideration are reassessed each reporting period and are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur upon resolution of uncertainty associated with the variable consideration. All of the Company’s contracts have a single performance obligation satisfied at a point in time and the transaction price is stated in the contract, usually as quantity time’s price per unit.

The Company has five revenue generating reportable geographic segments under ASC Topic 280 “Segment Reporting” and derives its sales primarily from its limited use/disposable protective clothing and secondarily from its sales of reflective clothing, high-end chemical protective suits, firefighting and heat protective apparel, reusable woven garments and gloves and arm guards. The Company believes disaggregation of revenue by geographic region best depicts the nature, amount, timing, and uncertainty of its revenue and cash flows. Net sales by geographic region are included below:

	Three Months Ended
	April 30,
	(in millions of dollars)
	2018		2017
External Sales:
USA	$	12.35	$	12.70
Other foreign		4.35		3.70
Europe (UK)		2.57		2.09
Mexico		1.11		0.57
China		3.95		3.90
Consolidated external sales	$	24.34	$	22.96

Accounts Receivable, Net. Trade accounts receivable are stated at the amount the Company expects to collect. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company recognizes losses when information available indicates that it is probable that a receivable has been impaired based on criteria noted in this paragraph at the date of the consolidated financial statements, and the amount of the loss can be reasonably estimated. Management considers the following factors when determining the collectability of specific customer accounts: Customer creditworthiness, past transaction history with the customers, current economic industry trends and changes in customer payment terms. Past due balances over 90 days and other less creditworthy accounts are reviewed individually for collectability. If the financial condition of the Company’s customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. Based on management’s assessment, the Company provides for estimated uncollectible amounts through a charge to earnings and a credit to a valuation allowance. Balances that remain outstanding after the Company has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable.

Inventories, net. Inventories include freight-in, materials, labor and overhead costs and are stated at the lower of cost (on a first-in, first-out basis) or net realized value. Provision is made for slow-moving, obsolete or unusable inventory.

Impairment of Long-Lived Assets. The Company evaluates the carrying value of long-lived assets to be held and used when events or changes in circumstances indicate the carrying value may not be recoverable. The Company measures any potential impairment on a projected undiscounted cash flow method. Estimating future cash flows requires the Company’s management to make projections that can differ materially from actual results. The carrying value of a long-lived asset is considered impaired when the total projected undiscounted cash flows from the asset is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. As of April 30, 2018, no impairment was recorded. As of January 31, 2018, a non-cash impairment charge was recorded to reflect the change in the carrying value of asset held for sale from $0.9 million to $0.2 million as the Company believed this to be the recoverable value of this asset held for sale on the Company’s consolidated balance sheet.

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Income Taxes. The Company is required to estimate its income taxes in each of the jurisdictions in which it operates as part of preparing the unaudited condensed consolidated financial statements. This involves estimating the actual current tax in addition to assessing temporary differences resulting from differing treatments for tax and financial accounting purposes. These differences, together with net operating loss carryforwards and tax credits, are recorded as deferred tax assets or liabilities on the Company’s consolidated balance sheet. A judgment must then be made of the likelihood that any deferred tax assets will be recovered from future taxable income. A valuation allowance may be required to reduce deferred tax assets to the amount that is more likely than not to be realized. In the event the Company determines that it may not be able to realize all or part of its deferred tax asset in the future, or that new estimates indicate that a previously recorded valuation allowance is no longer required, an adjustment to the deferred tax asset is charged or credited to income in the period of such determination.

The Company recognizes tax positions that meet a “more likely than not” minimum recognition threshold. If necessary, the Company recognizes interest and penalties associated with tax matters as part of the income tax provision and would include accrued interest and penalties with the related tax liability in the unaudited condensed consolidated balance sheets.

Foreign Operations and Foreign Currency Translation. The Company maintains manufacturing operations in the People’s Republic of China, Mexico, Vietnam, India, and Argentina and can access independent contractors in China, Vietnam, Argentina, and Mexico. It also maintains sales and distribution entities located in China, Canada, the U.K., Chile, Argentina, Russia, Kazakhstan, Mexico, and India. The Company is vulnerable to currency risks in these countries. The functional currency for the United Kingdom subsidiary is the Euro; the trading company in China, the RMB; the Canadian Real Estate subsidiary, the Canadian dollar; and the Russian operation, the Russian Ruble; the Kazakhstan operation the Kazakhstan Tenge and the Vietnam operation, the Vietnam Dong. All other operations have the US dollar as its functional currency.

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Pursuant to US GAAP, assets and liabilities of the Company’s foreign operations with functional currencies other than the US dollar, are translated at the exchange rate in effect at the balance sheet date, while revenues and expenses are translated at average rates prevailing during the periods. Translation adjustments are reported in accumulated other comprehensive loss, a separate component of stockholders’ equity. Cash flows are also translated at average translation rates for the periods, therefore amounts reported on the unaudited condensed consolidated statement of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheet. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

Fair Value of Financial Instruments. US GAAP defines fair value, provides guidance for measuring fair value and requires certain disclosures utilizing a fair value hierarchy which is categorized into three levels based on the inputs to the valuation techniques used to measure fair value. The following is a brief description of those three levels:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3: Unobservable inputs that reflect management’s own assumptions.

The financial instruments of the Company classified as current assets or liabilities, including cash and cash equivalents, accounts receivable, short-term borrowings, borrowings under revolving credit facility, accounts payable and accrued expenses, are recorded at carrying value, which approximates fair value based on the short-term nature of these instruments.

The Company believes that the fair values of its long-term debt approximates its carrying value based on the effective interest rate compared to the current market rate available to the Company.

Recent Accounting Pronouncements

See Note 3 in the unaudited condensed consolidated financial statements for management’s periodic review of new accounting standards that were issued.

Significant Balance Sheet Fluctuation April 30, 2018, As Compared to January 31, 2018

Balance Sheet Accounts. In the quarter ended April 30, 2018, inventory levels were increased by $1.5 million and accounts payable increased $0.8 million as the Company continues to work through backlogs and as sales volume improved.

Three Months ended April 30, 2018, As Compared to the Three Months Ended April 30, 2017

Net Sales. Net sales increased to $24.3 million for the three months ended April 30, 2018 compared to $23.0 million for the three months ended April 30, 2017, an increase of 6.0%. Sales in the USA saw a small decrease of $0.2 million or 1.1%. Sales in China and to the Asia Pacific Rim increased $3.3 million or 31.5% primarily due to increased intercompany demands as industrial activity improved and several larger customers began replacing depleted inventories. Canada sales increased $0.4 million as that country continues to experience an oil and gas turnaround requiring protective wear. UK sales increased $0.4 million or 20.7% mostly due to initial stocking orders from new distributors in Europe. Russia and Kazakhstan sales combined increased $0.5 million or 103.7% as we continue to gain customers in this region, and Latin America sales remained level as compared to the prior period but we continue to see an overall increase in industrial activity in that region.

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Gross Profit. Gross profit increased $0.9 million, or 11.1%, to $9.5 million for the three months ended April 30, 2018, from $8.6 million for the three months ended April 30, 2017. Gross profit as a percentage of net sales increased to 39.0% for the three-month period ended April 30, 2018, from 37.3% for the three months ended April 30, 2017. Major factors driving gross margins were:

· Disposables gross margins increased 4.6 percentage points as the Company continues to maximize production efficiency and as product price increases were implemented in the quarter.

· Chemical gross margin increased by 20.2 percentage points primarily due to product mix and as product price increases were implemented in the quarter.

· Wovens gross margins increased 7.9 percentage points as the Company increased sales of higher margin FR products into the pipeline industry.

· Reflective gross margins decreased 3.1 percentage points as a result of product mix and price decreases on certain products to increase competitiveness of bids on large contracts.

· Fire gross margins decreased 10.6 percentage points due to the discounting of some products as new standards are being implemented.

· UK gross margins increased 2.5 percentage points as a result of price increases implemented in the quarter, slightly offset by a sales shift into lower margin products.

· Canada’s gross margins increased 4.4 percentage points as a result of product mix and volume increases associated with an upsurge in the oil and gas industry.

Operating expenses. Operating expense increased 16.5% to $7.1 million for the three months ended April 30, 2018 from $6.1 million for the three months ended April 30, 2017. Operating expense as a percentage of net sales was 29.1% for the three months ended April 30, 2018 up from 26.5% for the three months ended April 30, 2017. The main factors for the increase in operating expenses are a $0.3 million charge for currency fluctuations primarily in Latin America, Russia and China, $0.1 million increase in professional fees associated with audit and tax work as the Company worked through a change in filer status and a change in the US tax code, a $0.1 increase in medical insurance due to increased claims experience under our self-insured medical insurance plan, a $0.3 million increase in sales salaries and a $0.1 million increase in advertising and travel as the Company continues to ramp up sales efforts and expand the international sales force, and a $0.1 million increase to freight out associated with increased volume.

Operating Profit. Operating profit decreased to a profit of $2.4 million for the three months ended April 30, 2018 from $2.5 million for the three months ended April 30, 2017, as the Company’s operating profit remained fairly consistent period over period. Operating margins were 9.9% for the three months ended April 30, 2018, compared to 10.8% for the three months ended April 30, 2017.

Interest Expense. Interest expense was relatively nominal for each of the three months ended April 30, 2018 and for the three months ended April 30, 2017 as the Company continues to hold borrowing to a minimum.

Income Tax Expense.  Income tax expense consists of federal, state and foreign income taxes. Income tax expense was $0.5 million for the three months ended April 30, 2018, as compared to $0.7 million for the three months ended April 30, 2017. The decrease in tax expense was primarily the result of the enactment of the 2017 Tax Cuts and Jobs Act (the “Tax Act”) and the associated lower corporate income tax rate.

Net Income.  Net income increased to $1.9 million for the three months ended April 30, 2018 from $1.7 for the three months ended April 30, 2017. The results for three months ended April 30, 2018 are primarily due to higher sales volume and higher gross profit margin than in the prior fiscal period.

Liquidity and Capital Resources

As of April 30, 2018, we had cash and cash equivalents of approximately $16.3 million and working capital of $68.0 million. Cash and cash equivalents increased $0.5 million and working capital increased $1.9 million from January 31, 2018. International cash management is affected by local requirements and movements of cash across borders can be slowed down significantly.

29

Of the Company’s total cash and cash equivalents of $16.3 million as of April 30, 2018, cash held in Argentina and Chile of $0.2 million, cash held in Russia of $0.3 million, cash held in the UK of $0.1 million, cash held in India of $0.2 million, cash held in Vietnam of $0.3 million, and cash held in Canada of $0.9 million would not be subject to additional US tax due to the change in the US tax law as a result of the December 22, 2017 enactment of the Tax Act. In the event that the Company repatriated cash from China, of the $4.6 million balance at April 30, 2018, there would be an additional 10% withholding tax incurred in that country. The Company has strategically employed a dividend plan subject to declaration and certain approvals in which its Canadian subsidiary sends dividends to the US in the amount of 100% of the previous year’s earnings, the UK subsidiary sends dividends to the US in the amount of 50% of the previous year’s earnings, and the Weifang China subsidiary sends dividends to the US in declared amounts of the previous year’s earnings. Dividends were declared for our China subsidiary in FY18 in the amount of $5.0 million, as approved by the Company’s board of directors in the fourth quarter, after management and outside tax advisors evaluated the impact of The Tax Act in the US and deemed the dividend distribution as beneficial to the Company. There were no dividends declared in the quarter ended April 30, 2018.

Net cash provided by operating activities of $0.9 million for the three months ended April 30, 2018 was primarily due to net income of $1.9 million and an increase to accounts payable of $0.8 million offset by an increase in inventories of $1.6 million. Net cash used in investing activities of $0.3 million was a result of equipment purchases in China and Mexico. Net cash used in financing activities of $0.1 was the result of small changes in our borrowings and repayments in the UK and Argentina and scheduled payments on the term loan in the US.  

Stock Repurchase Program. On July 19, 2016, the Company’s board of directors approved a stock repurchase program under which the Company may repurchase up to $2,500,000 of its outstanding common stock. The Company has not repurchased any stock under this program as of the date of this filing.

Capital Expenditures. Our capital expenditures in the first quarter of FY19 of $0.3 million principally relate to additions to equipment in China and manufacturing equipment, computer systems and leasehold improvements in the US. We anticipate FY19 capital expenditures to be approximately $2.5 million as there is an Enterprise Resource Planning (“ERP”) project in process and we are expanding our manufacturing capacity to include Vietnam and India operations.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Foreign Currency Risk

We are exposed to changes in foreign currency exchange rates as a result of our purchases and sales in other countries. To manage the volatility relating to foreign currency exchange rates, we seek to limit, to the extent possible, our non-US dollar denominated purchases and sales.

Most of our assembly arrangements with our foreign-based subsidiaries or third-party suppliers require payment to be made in US dollars or Renminbi (“RMB”). Any decrease in the value of the US dollar or the Euro, in relation to foreign currencies, could increase the cost of the services provided to us upon contract expirations or supply renegotiations. There can be no assurance that we will be able to increase product prices to offset any such cost increases, and any failure to do so could have a material adverse effect on our business, financial condition and results of operations.

Our primary risk from foreign currency exchange rate changes is presently related to non-US dollar denominated sales in China, Canada and Europe and, to a smaller extent, in South American countries and in Russia. Our sales to customers in Canada are denominated in Canadian dollars, in Europe in Euros and British pounds, and in China in RMB and US dollars. If the value of the US dollar increases relative to the Canadian dollar, the Pound, the Euro, or the RMB then our net sales could decrease as our products would be more expensive to these international customers because of changes in rate of exchange. We manage the foreign currency risk when appropriate through the use of rolling 90-day forward contracts against the Canadian dollar and Euro and through cash flow hedges in the US against the RMB and the Euro. We do not hedge other currencies at this time. In the event that non-US dollar denominated international purchases and sales grow, exposure to volatility in exchange rates could have a material adverse impact on our financial results.

30

Interest Rate Risk

We are exposed to interest rate risk with respect to our credit facilities, which have variable interest rates based upon the London Interbank Offered Rate. At April 30, 2018, we had approximately $1.3 million in borrowings outstanding under our term loan with our primary lender. If the interest rate applicable to our variable credit line (assuming full borrowing of $20 million) rose 1% in the quarter ended April 30, 2018, our interest expense would have increased $0.2 million. At April 30, 2018, there were no borrowings under this credit line.

Tax Risks

We are exposed to tax rate risk with respect to our deferred tax asset. 

Tax Reform

On December 22, 2017, new federal tax reform legislation was enacted in the United States, resulting in significant changes from previous tax law.  The 2017 Tax Cuts and Jobs Act (the Tax Act) reduces the federal corporate income tax rate to 21% from 35% effective January 1, 2018.  As a result of the Tax Act, we applied a blended US statutory federal income tax rate of 33.81% for the year ended January 31, 2018. The Tax Act requires us to recognize the effect of the tax law changes in the period of enactment, such as determining the transition tax (see below), re-measuring our US deferred tax assets as well as reassessing the net realizability of our deferred tax assets. The Company completed this re-measurement and reassessment in the most recently completed fiscal year.  The rate change, along with certain immaterial changes in tax basis resulting from the 2017 Tax Act, resulted in a reduction of our net deferred tax asset to $7.6 million with related income tax expense of $5.1 million, thus dramatically increasing our effective tax rate in the fiscal year ended January 31, 2018 and reducing it in future periods, including the period ended April 30, 2018.

Transition Tax

Upon enactment of the Tax Act, there is a one-time deemed repatriation tax on undistributed foreign earnings and profits (the “transition tax”). This tax is assessed on the US shareholder’s share of the foreign corporation’s accumulated foreign earnings and profits that have not previously been taxed. Earnings in the form of cash and cash equivalents will be taxed at a rate of 15.5% and all other earnings and profits will be taxed at a rate of 8.0%. We recognized tax expense of approximately $5.1 million related to the transition tax in 2017. However, foreign tax credits were used of approximately $5.1 million to fully offset this transition tax and the Company will not incur any cash outlay related to this tax. 

We previously considered substantially all of the earnings in our non-US subsidiaries to be indefinitely reinvested outside the US and, accordingly, recorded no deferred income taxes on such earnings.  At this time, and until we fully analyze the applicable provisions of the Tax Act, our intention with respect to unremitted foreign earnings is to continue to indefinitely reinvest outside the US those earnings needed for working capital or additional foreign investment. Apart from the transition tax, any incremental deferred income taxes on the unremitted foreign earnings and profits are not expected to be material.

While the Tax Act provides for a modified territorial tax system, beginning in the fiscal year ending January 31, 2019, it includes two new US tax base erosion provisions, the Global Intangible Low-Taxed Income (“GILTI”) provisions and the Base-Erosion and Anti-Abuse Tax (“BEAT”) provisions. The GILTI provisions require the Company to include in its US income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets. The Company does not expect that the GILTI income inclusion will result in significant US tax beginning in the current fiscal year ending January 31, 2019. The BEAT provisions in the Tax Act eliminates the deduction of certain base-erosion payments made to related foreign corporations and impose a minimum tax if greater than regular tax. The Company does not expect that the BEAT provision will result in significant US tax beginning in FY19. In addition, the Company intends to account for the GILTI tax in the period in which it is incurred, and therefore has not provided any deferred tax impacts of GILTI in its unaudited condensed consolidated financial statements for the quarter ended April 30, 2018.

31

We may be exposed to continuing and other liabilities arising from our former Brazilian operations.

During the fiscal year ended January 31, 2016 the Company formally completed the terms of the “Shares Transfer Agreement” and executed its exit from Brazil, but we may continue to be exposed to certain liabilities arising in connection with the prior operations of Lakeland Brazil. The Company understands that under the laws of Brazil, a concept of fraudulent conveyance exists, which may hold a parent company liable for the liabilities of a former Brazilian subsidiary in the event some level of fraud or misconduct is shown during the period that the parent company owned the subsidiary. While the Company believes that there has been no such fraud or misconduct relating to operations of and their exit from Brazil, there can be no assurance that the courts of Brazil will not make such a finding. The risk of exposure to the Company continues to diminish as the former subsidiary continues to operate, as the statute of limitations for claiming fraudulent conveyance has now expired, as labor cases pre-dating the expiration of the statute of limitations are concluded, except the four open cases, so as to preclude any such finding, and as pre-shares transfer agreement liabilities are satisfied. As the former subsidiary has stayed in operation for a period of greater than two years, the Company believes the risk of a finding of fraudulent conveyance has virtually been eliminated.

As disclosed in our periodic filings with the SEC, we agreed to make certain payments in connection with ongoing labor litigation involving our former Brazilian subsidiary. While the vast majority of these labor suits have been resolved, there are four which remain active. In one such case a former employee of our former Brazilian subsidiary recently filed a counterclaim in the action seeking approximately US $0.7 million that he purports to be owed to him by our former Brazilian subsidiary under a purported promissory note and alleges that we are liable for payment therefore. Management firmly believes the counterclaim is without merit, intends to vigorously defend our position, and does not anticipate a negative outcome resulting in significant expense to us.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

We conducted an evaluation, under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of April 30, 2018. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based on their evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of April 30, 2018.

Changes in Internal Control over Financial Reporting

There have been no changes that occurred during Lakeland's first quarter of fiscal 2019 which materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Items 1, 1A, 2, 3, 4 and 5 are not applicable

Item 6. Exhibits:

Exhibits:    * Filed herewith

31.1*	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*	XBRL instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Definitions Document
101.DEF*	XBRL Taxonomy Extension Labels Document
101.LAB*	XBRL Taxonomy Extension Labels Document
101.PRE*	XBRL Taxonomy Extension Presentations Document

32

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	LAKELAND INDUSTRIES, INC.
	(Registrant)
Date: June 8, 2018	/s/ Christopher J. Ryan
	Christopher J. Ryan,
	Chief Executive Officer, President and Secretary (Principal Executive Officer and Authorized Signatory)
Date: June 8, 2018	/s/ Teri W. Hunt
	Teri W. Hunt,
	Chief Financial Officer (Principal Accounting Officer and Authorized Signatory)

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EX-31.1

Exhibit 31.1

CERTIFICATION

I, Christopher J. Ryan, certify that:

1. I have reviewed this report on Form 10-Q of Lakeland Industries, Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant, and we have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: June 8, 2018

/s/ Christopher J. Ryan

By: Christopher J. Ryan,

Chief Executive Officer,

President and Secretary

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Teri W. Hunt, certify that:

1. I have reviewed this report on Form 10-Q of Lakeland Industries, Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant, and we have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: June 8, 2018	/s/ Teri W. Hunt
	By: Teri W. Hunt, Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION

In connection with the filing with the Securities and Exchange Commission of the Quarterly Report of Lakeland Industries, Inc. (the “Company”) on Form 10-Q for the period ended April 30, 2018 (the “Report”), I, Christopher J. Ryan, Chief Executive Officer, President and Secretary of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)       The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)       The information contained in the Report fairly presents in all material respects, the financial condition and results of operations of the Company.

June 8, 2018	/s/Christopher J. Ryan
	Christopher J. Ryan
	Chief Executive Officer, President and Secretary

EX-32.2

Exhibit 32.2

CERTIFICATION 2

In connection with the filing with the Securities and Exchange Commission of the Quarterly Report of Lakeland Industries, Inc. (the “Company”) on Form 10-Q for the period ended April 30, 2018 (the “Report”), I, Teri W. Hunt, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)       The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)       The information contained in the Report fairly presents in all material respects, the financial condition and results of operations of the Company.

June 8, 2018	/s/ Teri W. Hunt
	Teri W. Hunt,
	Chief Financial Officer

XML

Document And Entity Information - shares	3 Months Ended
	Apr. 30, 2018	Jun. 05, 2018
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Apr. 30, 2018
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Entity Registrant Name	LAKELAND INDUSTRIES INC
Entity Central Index Key	0000798081
Current Fiscal Year End Date	--01-31
Entity Filer Category	Accelerated Filer
Trading Symbol	LAKE
Entity Common Stock, Shares Outstanding		8,116,199

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2018	Apr. 30, 2017
Net sales	$ 24,344	$ 22,961
Cost of goods sold	14,840	14,403
Gross profit	9,504	8,558
Operating expenses	7,088	6,085
Operating profit	2,416	2,473
Other income (expense), net	(1)	2
Interest expense	31	76
Income before taxes	2,384	2,399
Income tax expense	517	688
Net income	$ 1,867	$ 1,711
Net income per common share:
Basic	$ 0.23	$ 0.24
Diluted	$ 0.23	$ 0.23
Weighted average common shares outstanding:
Basic	8,116,199	7,263,774
Diluted	8,160,380	7,353,660

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2018	Apr. 30, 2017
Net income	$ 1,867	$ 1,711
Other comprehensive loss:
Foreign currency translation adjustments	(203)	(90)
Comprehensive income	$ 1,664	$ 1,621

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands		Apr. 30, 2018	Jan. 31, 2018
Current assets
Cash and cash equivalents		$ 16,285	$ 15,788
Accounts receivable, net of allowance for doubtful accounts of $440 and $480 at April 30, 2018 and January 31, 2018, respectively		14,578	14,119
Inventories, net of allowance of $2,445 and $2,422 at April 30, 2018 and January 31, 2018, respectively		44,411	42,919
Prepaid VAT tax		1,903	2,119
Other current assets		2,237	1,555
Total current assets		79,414	76,500
Property and equipment, net		8,821	8,789
Assets held for sale		150	150
Deferred income tax		7,369	7,557
Prepaid VAT and other taxes		305	310
Other assets		342	354
Goodwill		871	871
Total assets	[1]	97,272	94,531
Current liabilities
Accounts payable		7,844	7,057
Accrued compensation and benefits		1,708	1,771
Other accrued expenses		1,486	1,182
Current maturity of long-term debt		158	158
Short-term borrowings		177	211
Total current liabilities		11,373	10,379
Long-term portion of debt		1,273	1,312
Total liabilities		12,646	11,691
Commitments and contingencies
Stockholders’ equity
Preferred stock, $0.01 par; authorized 1,500,000 shares (none issued)		0	0
Common stock, $.01 par; authorized 10,000,000 shares, Issued 8,472,640 shares; outstanding 8,116,199 shares		85	85
Treasury stock, at cost; 356,441 shares		(3,352)	(3,352)
Additional paid-in capital		75,038	74,917
Retained earnings		14,709	12,841
Accumulated other comprehensive loss		(1,854)	(1,651)
Total stockholders' equity		84,626	82,840
Total liabilities and stockholders' equity		$ 97,272	$ 94,531

[1] Negative assets reflect intersegment amounts eliminated in consolidation

XML

CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] - USD ($) $ in Thousands	Apr. 30, 2018	Jan. 31, 2018
Allowance for doubtful accounts (in dollars)	$ 440	$ 480
Inventories, net of reserves	$ 2,445	$ 2,422
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	1,500,000	1,500,000
Preferred stock, shares issued	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	10,000,000	10,000,000
Common stock, shares issued	8,472,640	8,472,640
Common stock, shares outstanding	8,116,199	8,116,199
Treasury stock, shares	356,441	356,441

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2018	Apr. 30, 2017
Cash flows from operating activities:
Net income	$ 1,867	$ 1,711
Adjustments to reconcile net income to net cash provided by operating activities
Provision for inventory obsolescence	23	223
Recovery of doubtful accounts	(40)	(78)
Deferred income taxes	188	305
Depreciation and amortization	187	186
Stock based and restricted stock compensation	119	99
Loss on disposal of property and equipment	5	0
(Increase) decrease in operating assets
Accounts receivable	(499)	(1,891)
Inventories	(1,603)	3,233
Prepaid VAT tax	216	159
Other current assets	(699)	50
Increase (decrease) in operating liabilities
Accounts payable	847	241
Accrued expenses and other liabilities	270	69
Net cash used by the sale of Brazil	0	(38)
Net cash provided by operating activities	881	4,269
Cash flows from investing activities:
Purchases of property and equipment	(272)	(141)
Cash flows from financing activities:
Net repayments under revolving credit facility	0	(2,502)
Loan repayments, long-term	(39)	(6)
Loan repayments, short-term	(61)	(18)
Loan borrowings, short-term	207	0
UK repayments under line of credit facility, net	(179)	(125)
Shares returned to pay employee taxes under restricted stock program	0	(1)
Net cash used in financing activities	(72)	(2,652)
Effect of exchange rate changes on cash and cash equivalents	(40)	7
Net increase in cash and cash equivalents	497	1,483
Cash and cash equivalents at beginning of period	15,788	10,365
Cash and cash equivalents at end of period	16,285	11,848
Supplemental disclosure of cash flow information:
Cash paid for interest	31	76
Cash paid for taxes	$ 303	$ 384

XML

Business

3 Months Ended

Apr. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Operations [Text Block]

1. Business

Lakeland Industries, Inc. and Subsidiaries (“Lakeland,” the “Company,” “we,” “our” or “us”), a Delaware corporation organized in April 1986, manufactures and sells a comprehensive line of safety garments and accessories for the industrial protective clothing market.

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Basis of Presentation

3 Months Ended

Apr. 30, 2018

Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies [Text Block]

2. Basis of Presentation

The unaudited condensed consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission, and reflect all adjustments (consisting of only normal and recurring adjustments) which are, in the opinion of management, necessary to present fairly the unaudited condensed consolidated financial information required herein. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted pursuant to such rules and regulations. While we believe that the disclosures are adequate to make the information presented not misleading, it is suggested that these unaudited condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission for the fiscal year ended January 31, 2018.

The results of operations for the three month period ended April 30, 2018 are not necessarily indicative of the results to be expected for the full year.

In this Form 10-Q, (a) “FY means fiscal year; thus for example, FY19 refers to the fiscal year ending January 31, 2019, (b) “Q” refers to quarter; thus, for example, Q1 FY19 refers to the first quarter of the fiscal year ending January 31, 2019, (c) “Balance Sheet” refers to the unaudited condensed consolidated balance sheet and (d) “Statement of Operations” refers to unaudited condensed consolidated statement of operations.

XML

Summary of Significant Accounting Policies

3 Months Ended

Apr. 30, 2018

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

3. Summary of Significant Accounting Policies

Principles of Consolidation

 The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated.

Use of Estimates and Assumptions

The preparation of the unaudited condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the balance sheet date, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. It is reasonably possible that events could occur during the upcoming year that could change such estimates.

Accounts Receivable, net

Trade accounts receivable are stated at the amount the Company expects to collect. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company recognizes losses when information available indicates that it is probable that a receivable has been impaired based on criteria noted in this paragraph at the date of the consolidated financial statements, and the amount of the loss can be reasonably estimated. Management considers the following factors when determining the collectability of specific customer accounts: Customer creditworthiness, past transaction history with the customers, current economic industry trends, changes in customer payment terms. Past due balances over 90 days and other less creditworthy accounts are reviewed individually for collectability. If the financial condition of the Company’s customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. Based on management’s assessment, the Company provides for estimated uncollectible amounts through a charge to earnings and a credit to a valuation allowance. Balances that remain outstanding after the Company has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable.

Inventories, net

Inventories include freight-in, materials, labor and overhead costs and are stated at the lower of cost (on a first-in, first-out basis) or net realizable value. Provision is made for slow-moving, obsolete or unusable inventory.

Impairment of Long-Lived Assets

The Company evaluates the carrying value of long-lived assets to be held and used when events or changes in circumstances indicate the carrying value may not be recoverable. The Company measures any potential impairment on a projected undiscounted cash flow method. Estimating future cash flows requires the Company’s management to make projections that can differ materially from actual results. The carrying value of a long-lived asset is considered impaired when the total projected undiscounted cash flows from the asset is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset.

Revenue Recognition

Substantially all of the Company’s revenue is derived from product sales, which consist of sales of the Company’s personal protective wear products to distributors. The Company considers purchase orders to be a contract with a customer. Contracts with customers are considered to be short-term when the time between order confirmation and satisfaction of the performance obligations is equal to or less than one year, and virtually all of the Company’s contracts are short-term. The Company recognizes revenue for the transfer of promised goods to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods. The Company typically satisfies its performance obligations in contracts with customers upon shipment of the goods. Generally, payment is due from customers within 30 to 90 days of the invoice date, and the contracts do not have significant financing components. The Company elected to account for shipping and handling activities as a fulfillment cost rather than a separate performance obligation. Shipping and handling costs associated with outbound freight are included in operating expenses, and for the quarters ended April 30, 2018 and 2017 aggregated approximately $0.6 million and $0.5 million, respectively. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenue.

The transaction price includes estimates of variable consideration, such as rebates, allowances, and discounts that are reductions in revenue. All estimates are based on the Company's historical experience, anticipated performance, and the Company's best judgment at the time the estimate is made. Estimates for variable consideration are reassessed each reporting period and are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur upon resolution of uncertainty associated with the variable consideration. All of the Company’s contracts have a single performance obligation satisfied at a point in time and the transaction price is stated in the contract, usually as quantity time’s price per unit.

The Company has five revenue generating reportable geographic segments under ASC Topic 280 “Segment Reporting” and derives its sales primarily from its limited use/disposable protective clothing and secondarily from its sales of reflective clothing, high-end chemical protective suits, firefighting and heat protective apparel, reusable woven garments and gloves and arm guards. The Company believes disaggregation of revenue by geographic region best depicts the nature, amount, timing, and uncertainty of its revenue and cash flows. Net sales by geographic region are included below:

	Three Months Ended
	April 30,
	(in millions of dollars)
	2018		2017
External Sales:
USA	$	12.35	$	12.70
Other foreign		4.35		3.70
Europe (UK)		2.57		2.09
Mexico		1.11		0.57
China		3.95		3.90
Consolidated external sales	$	24.34	$	22.96

Income Taxes

The Company is required to estimate its income taxes in each of the jurisdictions in which it operates as part of preparing the unaudited condensed consolidated financial statements. This involves estimating the actual current tax in addition to assessing temporary differences resulting from differing treatments for tax and financial accounting purposes. These differences, together with net operating loss carryforwards and tax credits, are recorded as deferred tax assets or liabilities on the Company’s unaudited condensed consolidated balance sheet. A judgment must then be made of the likelihood that any deferred tax assets will be recovered from future taxable income. A valuation allowance may be required to reduce deferred tax assets to the amount that is more likely than not to be realized. In the event the Company determines that it may not be able to realize all or part of its deferred tax asset in the future, or that new estimates indicate that a previously recorded valuation allowance is no longer required, an adjustment to the deferred tax asset is charged or credited to income in the period of such determination.

The Company recognizes tax positions that meet a “more likely than not” minimum recognition threshold. If necessary, the Company recognizes interest and penalties associated with tax matters as part of the income tax provision and would include accrued interest and penalties with the related tax liability in the unaudited condensed consolidated balance sheets.

Foreign Operations and Foreign Currency Translation

The Company maintains manufacturing operations in Mexico, India, Argentina and the People’s Republic of China and can access independent contractors in China, Vietnam, Argentina and Mexico. It also maintains sales and distribution entities located in India, Canada, the U.K., Chile, China, Argentina, Russia, Kazakhstan and Mexico. The Company is vulnerable to currency risks in these countries. The functional currency for the United Kingdom subsidiary is the Euro; the trading company in China, the RMB; the Canadian Real Estate subsidiary, the Canadian dollar; the Russian operation, the Russian Ruble; the Kazakhstan operation the Kazakhstan Tenge and the Vietnam operation, the Vietnam Dong. All other operations have the US dollar as its functional currency.

Pursuant to US GAAP, assets and liabilities of the Company’s foreign operations with functional currencies, other than the US dollar, are translated at the exchange rate in effect at the balance sheet date, while revenues and expenses are translated at average rates prevailing during the periods. Translation adjustments are reported in accumulated other comprehensive loss, a separate component of stockholders’ equity. Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the unaudited condensed consolidated statement of cash flows will not necessarily agree with changes in the corresponding balances on the unaudited condensed consolidated balance sheet. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Foreign currency transaction losses included in net income for the three months ended April 30, 2018 was approximately $243,000 and for the three months ended April 30, 2017 was approximately $65,000.

Fair Value of Financial Instruments 

US GAAP defines fair value, provides guidance for measuring fair value and requires certain disclosures utilizing a fair value hierarchy which is categorized into three levels based on the inputs to the valuation techniques used to measure fair value.

The following is a brief description of those three levels:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2:  Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3:  Unobservable inputs that reflect management’s own assumptions.

The financial instruments of the Company classified as current assets or liabilities, including cash and cash equivalents, accounts receivable, short-term borrowings, borrowings under revolving credit facility, accounts payable and accrued expenses, are recorded at carrying value, which approximates fair value based on the short-term nature of these instruments.

The Company believes that the fair values of its long-term debt approximates its carrying value based on the effective interest rate compared to the current market rate available to the Company.

Earnings Per Share

Basic earnings per share are based on the weighted average number of common shares outstanding without consideration of common stock equivalents. Diluted earnings per share are based on the weighted average number of common shares and common stock equivalents. The diluted earnings per share calculation takes into account unvested restricted shares and the shares that may be issued upon exercise of stock options, reduced by shares that may be repurchased with the funds received from the exercise, based on the average price during the period.

Recent Accounting Pronouncements

The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued.

New Accounting Pronouncements Recently Adopted

In May 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting.” The amendment amends the scope of modification accounting for share-based payment arrangements, provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718. For all entities, the ASU is effective for annual reporting periods, including interim periods within those annual reporting periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period. The Company will apply the amendments in this update prospectively to an award modified on or after February 1, 2018 and does not expect that application of this guidance will have a material impact on its unaudited condensed consolidated financial statements and related disclosures.

As disclosed in Revenue Recognition above, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) effective February 1, 2018 using the retrospective transition method. This new accounting standard outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers. This standard supersedes existing revenue recognition requirements and eliminates most industry-specific guidance from US GAAP. The core principle of the new accounting standard is to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the adoption of this new accounting standard resulted in increased disclosure, including qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, the Company elected to account for shipping and handling activities as a fulfillment cost rather than a separate performance obligation. Adoption of this standard did not result in significant changes to the Company’s accounting policies, business processes, systems or controls, or have a material impact on the Company’s financial position, results of operations and cash flows or related disclosures. As such, prior period financial statements were not recast.

New Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). ASU 2016-02 requires lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early application is permitted for all entities. ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into after, the date of initial application, with an option to elect to use certain transition relief. The Company is currently evaluating the impact of this new standard on its unaudited condensed consolidated financial statements but has not determined the effects that the adoption of the pronouncement may have on its unaudited condensed consolidated financial statements and related disclosures.

In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income,” which allows institutions to elect to reclassify the stranded tax effects from AOCI to retained earnings, limited only to amounts in AOCI that are affected by the tax reform law. For public entities, the amendments are effective for annual reporting periods beginning after December 15, 2018, including interim reporting periods within that reporting period. For all other entities, the amendments in this Update are effective for annual reporting periods beginning after December 15, 2019, including interim reporting periods within that reporting period. The Company does not expect that adoption of this guidance will have a material impact on its unaudited condensed consolidated financial statements and related disclosures.

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Inventories, net

3 Months Ended

Apr. 30, 2018

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

4. Inventories, net

Inventories, net consist of the following (in $000s): 

	April 30, 2018		January 31, 2018
Raw materials	$	14,172	$	14,767
Work-in-process		2,235		2,357
Finished goods		28,004		25,795
	$	44,411	$	42,919

XML

Long-Term Debt

3 Months Ended

Apr. 30, 2018

Debt Disclosure [Abstract]

Long-term Debt [Text Block]

5. Long-Term Debt

Revolving Credit Facility

On June 28, 2013, as amended on March 31, 2015 and June 3, 2015, the Company and its wholly owned Canadian subsidiary, Lakeland Protective Wear Inc. (collectively the “Borrowers”), entered into a Loan and Security Agreement (the “AloStar Loan Agreement”) with AloStar Business Credit, a division of AloStar Bank of Commerce (“AloStar”). The AloStar Loan Agreement provided the Borrowers with a $15 million revolving line of credit (the “AloStar Credit Facility”), at a variable interest rate based on LIBOR, with a first priority lien on substantially all of the United States and Canada assets of the Company, except for its Mexican plant and the Canadian warehouse.  After these amendments the maturity date of the AloStar Credit Facility was extended to June 28, 2017 and the minimum interest rate floor became 4.25% per annum. On May 10, 2017, the AloStar Loan Agreement was terminated, and the existing balance due was repaid with the proceeds from a new loan agreement with SunTrust Bank.

On May 10, 2017, the Company entered into a Loan Agreement (the “Loan Agreement”) with SunTrust Bank (“Lender”). The Loan Agreement provides the Company with a secured (i) $20.0 million revolving credit facility, which includes a $5.0 million letter of credit sub-facility, and (ii) $1,575,000 term loan with Lender. The Company may request from time to time an increase in the revolving credit loan commitment of up to $10.0 million (for a total commitment of up to $30.0 million). Borrowing pursuant to the revolving credit facility is subject to a borrowing base amount calculated as (a) 85% of eligible accounts receivable, as defined, plus (b) an inventory formula amount, as defined, minus (c) an amount equal to the greater of (i) $1,500,000 or (ii) 7.5% of the then current revolver commitment amount, minus (d) certain reserves as determined by the Loan Agreement. The credit facility matures on May 10, 2020 (subject to earlier termination upon the occurrence of certain events of default as set forth in the Loan Agreement). At the closing, the Company’s existing financing facility with AloStar was fully repaid and terminated using proceeds of the revolver in the amount of approximately $3.0 million.

Borrowings under the term loan and the revolving credit facility bear interest at an interest rate determined by reference whether the loan is a base rate loan or Eurodollar loan, with the rate election made by the Company at the time of the borrowing or at any time the Company elects pursuant to the terms of the Loan Agreement. The term loan is payable in equal monthly principal installments of $13,125 each, beginning on June 1, 2017, and on the first day of each succeeding month, with a final payment of the remaining principal and interest on May 10, 2020 (subject to earlier termination as provided in the Loan Agreement). For that portion of the term loan that consists of Eurodollar loans, the term loan shall bear interest at the LIBOR Market Index Rate (“LIBOR”) plus 2.0% per annum, and for that portion of the term loan that consists of base rate loans, the term loan shall bear interest at the base rate then in effect plus 1.0% per annum. All principal and unpaid accrued interest under the revolver credit facility shall be due and payable on the maturity date of the revolver. For that portion of the revolver loan that consists of Eurodollar loans, the revolver shall bear interest at LIBOR plus a margin rate of 1.75% per annum for the first six months and thereafter between 1.5% and 2.0%, depending on the Company’s “availability calculation” (as defined in the Loan Agreement) and, for that portion of the revolver that consists of base rate loans, the revolver shall bear interest at the base rate then in effect plus a margin rate of 0.75% per annum for the first six months and thereafter between 0.50% and 1.0%, depending on the availability calculation. As of the closing, the Company elected all borrowings under the Loan Agreement to accrue interest at LIBOR which, as of that date, was 0.99500%. As such, the initial rate of interest for the revolver is 2.745% per annum and the initial rate of interest for the term loan is 2.995% per annum. The Loan Agreement provides for payment of an unused line fee of between 0.25% and 0.50%, depending on the amount by which the revolving credit loan commitment exceeds the amount of the revolving credit loans outstanding (including letters of credit), which shall be payable monthly in arrears on the average daily unused portion of the revolver. There were no borrowings outstanding as of April 30, 2018 or at January 31, 2018.

The Company agreed to maintain a minimum “fixed charge coverage ratio” (as defined in the Loan Agreement) as of the end of each fiscal quarter, commencing with the fiscal quarter ended July 31, 2017, of not less than 1.10 to 1.00 during the applicable fiscal quarter, and agreed to certain negative covenants that are customary for credit arrangements of this type, including restrictions on the Company’s ability to enter into mergers, acquisitions or other business combination transactions, conduct its business, grant liens, make certain investments, incur additional indebtedness, and make stock repurchases.

In connection with the Loan Agreement, the Company entered into a security agreement, dated May 10, 2017, with Lender pursuant to which the Company granted to Lender a first priority perfected security interest in substantially all real and personal property of the Company.

Borrowings in UK

On December 31, 2014, the Company and Lakeland Industries Europe, Ltd, (“Lakeland UK”), a wholly owned subsidiary of the Company, amended the terms of its existing line of credit facility with HSBC Bank to provide for (i) a one-year extension of the maturity date of the existing financing facility to December 19, 2016, (ii) an increase in the facility limit from £1,250,000 (approximately USD $1.9 million, based on exchange rates at time of closing) to £1,500,000 (approximately USD $2.3 million, based on exchange rates at time of closing), and (iii) a decrease in the annual interest rate margin from 3.46% to 3.0%. In addition, pursuant to a letter agreement dated December 5, 2014, the Company agreed that £400,000 (approximately USD $0.6 million, based on exchange rates at time of closing) of the note payable by the UK subsidiary to the Company shall be subordinated in priority of payment to the subsidiary’s obligations to HSBC under the financing facility. The balance under this loan outstanding at April 30, 2018 and January 31, 2018 was USD $0.0 million and USD $0.2 million, respectively. On December 31, 2016, Lakeland UK entered into an extension of the maturity date of its existing facility with HSBC Invoice Finance (UK) Ltd. to December 19, 2017. Other than the extension of the maturity date and a small reduction of the service charge from 0.9% to 0.85%, all other terms of the facility remained the same. On September 4, 2017 the facility was amended to include Algeria as an approved country. On December 4, 2017 the facility was extended to March 31, 2018 for the next review period and, as of March 9, 2018 the facility was extended to mature on March 31, 2019 with no additional changes to the terms.

Canada Loans

In September 2013, the Company refinanced its loan with the Development Bank of Canada (“BDC”) for a principal amount of approximately $1.1 million in both Canadian dollars and USD (based on exchange rates at time of closing). Such loan was for a term of 240 months at an interest rate of 6.45% per annum with fixed monthly payments of approximately USD $6,048 (CAD $8,169) including principal and interest. It was collateralized by a mortgage on the Company's warehouse in Brantford, Ontario. This loan was paid in full on September 26, 2017.

Argentina Loan

In April 2015, Lakeland Argentina S.R.L. (“Lakeland Argentina”), the Company’s Argentina subsidiary was granted a $300,000 line of credit denominated in Argentine pesos, pursuant to a standby letter of credit granted by the parent company. The line of credit outstanding at April 30, 2018, was approximately $177,000 as noted below.

The following three loans were made under the $300,000 facility stated above:

On July 1, 2016, Lakeland Argentina and Banco de la Nación Argentina (“BNA”) entered into an agreement for Lakeland Argentina to obtain a loan in the amount of ARS 569,000 (approximately USD $38,000, based on exchange rates at time of closing); such loan was for a term of one year at an interest rate of 27.06% per annum. This agreement was paid in full prior to January 31, 2018.

On May 19, 2017 Lakeland Argentina and BNA entered into an agreement for Lakeland Argentina to obtain a loan in the amount of ARS $1.8 million (approximately USD $112,000, based on exchange rates at time of closing); such loan is for a term of one year at an interest rate of 20.0% per annum. The amount outstanding at April 30, 2018 was ARS $0.2 million (approximately USD $7,000) which is included as short-term borrowings on the unaudited condensed consolidated balance sheet.)

On February 26, 2018 Lakeland Argentina and BNA entered into an agreement for Lakeland Argentina to obtain a loan in the amount of ARS $4.3 million (approximately USD $215,000, based on exchange rates at time of closing); such loan is for a term of one year at an interest rate of 32.0% per annum. The amount outstanding at April 30, 2018 was ARS $3.5 million (approximately USD $170,000) which is included as short-term borrowings on the unaudited condensed consolidated balance sheet.)

Below is a table to summarize the debt amounts above (in 000’s):

									Current Maturity of
	Short-Term				Long-term				Long-term
	4/30/2018		1/31/2018		4/30/2018		1/31/2018		4/30/2018		1/31/2018
Argentina	$	177	$	31	$	—	$	—	$	—	$	—
UK		—		180		—		—		—		—
USA		—		—		1,273		1,312		158		158
Totals	$	177	$	211	$	1,273	$	1,312	$	158	$	158

Five-year Debt Payout Schedule

This schedule reflects the liabilities as of April 30, 2018, and does not reflect any subsequent event (in 000’s):

													After
			1 Year		2		3		4		5		5
	Total		or less		Years		Years		Years		Years		Years
Borrowings in USA	$	1,431	$	158	$	158	$	1,115	$	—	$	—	$	—
Borrowings in Argentina		177		177		—		—		—		—		—
Total	$	1,608	$	335	$	158	$	1,115	$	—	$	—	$	—

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Concentration of Risk

3 Months Ended

Apr. 30, 2018

Risks and Uncertainties [Abstract]

Concentration Risk Disclosure [Text Block]

6. Concentration of Risk

Credit Risk

Financial instruments, which potentially subject the Company to concentration of credit risk, consist principally of cash and cash equivalents, and trade receivables. Concentration of credit risk with respect to trade receivables is generally diversified due to the large number of entities comprising the Company’s customer base and their dispersion across geographic areas. The Company routinely addresses the financial strength of its customers and, as a consequence, believes that its receivable credit risk exposure is limited. The Company does not require customers to post collateral.

The Company’s foreign financial depositories are Bank of America; China Construction Bank; Bank of China; China Industrial and Commercial Bank; HSBC; Rural Credit Cooperative of Shandong; Postal Savings Bank of China; Punjab National Bank; HSBC in India, Argentina and UK; Raymond James in Argentina; TD Canada Trust; Banco Itaú S.A., Banco Credito Inversione in Chile; Banco Mercantil Del Norte SA in Mexico; ZAO KB Citibank Moscow in Russia, and JSC Bank Centercredit in Kazakhstan. The Company monitors its financial depositories by their credit rating which varies by country. In addition, cash balances in banks in the United States of America are insured by the Federal Deposit Insurance Corporation subject to certain limitations. There is approximately $9.6 million total included in the US bank accounts and approximately $6.7 million total in foreign bank accounts as of April 30, 2018.

Major Customer

No customer accounted for more than 10% of net sales during the three month periods ended April 30, 2018 and 2017.

Major Supplier

No supplier accounted for more than 10% of purchases during the three month periods ended April 30, 2018 and 2017.

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Stockholders’ Equity

3 Months Ended

Apr. 30, 2018

Equity [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

7. Stockholders’ Equity

 The 2017, 2015 and 2012 Stock Plans

On June 21, 2017, the stockholders of the Company approved the Lakeland Industries, Inc. 2017 Equity Incentive Plan (the “2017 Plan”) at the Annual Meeting of Stockholders. The executive officers and all other employees and directors of the Company, including its subsidiaries are eligible to participate in the 2017 Plan. The 2017 Plan is administered by the Compensation Committee of the Board of Directors (the “Committee”), except that with respect to all non-employee directors, the Committee shall be deemed to include the full Board. The 2017 Plan provides for the grant of equity-based compensation in the form of stock options, restricted stock, restricted stock units, performance shares, performance units, or stock appreciation rights.

The Committee has the authority to determine the type of award, as well as the amount, terms and conditions of each award, under the 2017 Plan, subject to the limitations and other provisions of the 2017 Plan. An aggregate of 360,000 shares of the Company’s common stock are authorized for issuance under the 2017 Plan, subject to adjustment as provided in the 2017 Plan for stock splits, dividends, distributions, recapitalizations and other similar transactions or events. If any shares subject to an award are forfeited, expire, lapse or otherwise terminate without issuance of such shares, such shares shall, to the extent of such forfeiture, expiration, lapse or termination, again be available for issuance under the 2017 Plan. The following table summarizes the unvested shares granted on September 12, 2017, which have been made under the 2017 Plan.

	Number of shares awarded total
	Minimum		Target		Maximum		Cap
Employees		21,145		31,718		42,291		50,748
Non-Employee Directors		7,246		10,870		14,493		17,391
Total		28,391		42,588		56,784		68,139

	Value at grant date (numbers below are rounded to the nearest $100)
	Minimum		Target		Maximum		Cap
Employees	$	291,800	$	437,700	$	583,600	$	700,300
Non-Employee Directors		100,000		150,000		200,000		240,000
Total	$	391,800	$	587,700	$	783,600	$	940,300

Of the total number of shares awarded at Maximum, there are an aggregate of 56,784 shares underlying restricted stock awards and in addition in the 2017 Plan there are 6,376 shares underlying awards of stock appreciation rights with a base price of $13.80 per share. These stock appreciation rights are classified as liability awards and are remeasured at fair value each reporting period until the award is settled. As of April 30, 2018 and January 31, 2018, the Company has recorded a liability in the amount of $0 and $1,913, respectively, related to these stock appreciation rights.

The actual number of shares of common stock of the Company, if any, to be earned by the award recipients is determined over a full three fiscal year performance period commencing on February 1, 2017 and ending on January 31, 2020, based on the level of earnings before interest, taxes, depreciation and amortization (“EBITDA”) achieved by the Company over this period. The EBITDA targets have been set for each of the Minimum, Target, Maximum and Cap levels, at higher amounts for each of the higher levels. The actual EBITDA amount achieved is determined by the Committee and may be adjusted for items determined to be unusual in nature or infrequent in occurrence, which items may include, without limitation, the charges or costs associated with restructurings of the Company or any subsidiary, discontinued operations, and the cumulative effects of accounting changes.

Under the 2017 Plan, as described above, the Company awarded performance-based restricted stock and stock appreciation rights to eligible employees and directors. Such awards were at either Minimum, Target, Maximum or Cap levels, based on three year EBITDA targets. The Company recognizes expense related to performance-based restricted share awards over the requisite performance period using the straight-line attribution method based on the most probable outcome (minimum, target, maximum, cap or zero) at the end of the performance period and the price of the Company’s common stock price at the date of grant. The Company is recognizing expense related to awards under the 2017 Plan at Maximum and these expenses were $65,824 for the three-month period ended April 30, 2018.

The 2017 Plan is the successor to the Lakeland Industries, Inc. 2015 Stock Plan (the “2015 Plan”). The executive officers and all other employees and directors of the Company and its subsidiaries were eligible to participate in the 2015 Plan. The 2015 Plan authorized the issuance of awards of restricted stock, restricted stock units, performance shares, performance units and other stock-based awards. The 2015 Plan also permitted the grant of awards that qualify for “performance-based compensation” within the meaning of Section 162(m) of the US Internal Revenue Code. The aggregate number of shares of the Company’s common stock that was issuable under the 2015 Plan was 100,000 shares. Under the 2015 Plan, as of April 30, 2018, there were 67,000 shares vested; of which 43,029 shares were issued and 23,971 shares were returned to the Company to pay employee taxes.

The 2015 Plan, was the successor to the Company’s 2012 Stock Incentive Plan (the “2012 Plan”). The Company’s 2012 Plan authorized the issuance of up to a maximum of 310,000 shares of the Company’s common stock to employees and directors of the Company and its subsidiaries in the form of restricted stock, restricted stock units, performance shares, performance units and other share-based awards. Under the 2012 Plan, as of April 30, 2018, the Company issued 293,887 fully vested shares of common stock, and at April 30, 2018, there are no outstanding shares to vest according to the terms of the 2012 Plan.

Under the 2012 Plan and the 2015 Plan, the Company generally awarded eligible employees and directors with either performance-based or time-based restricted shares. Performance-based restricted shares were awarded at either baseline (target), maximum or zero amounts. The number of restricted shares subject to any award was not tied to a formula or comparable company target ranges, but rather was determined at the discretion of the Committee at the end of the applicable performance period, which was two years under the 2015 Plan and had been three years under the 2012 Plan. The Company recognized expense related to performance-based restricted share awards over the requisite performance period using the straight-line attribution method based on the most probable outcome (baseline, maximum or zero) at the end of the performance period and the price of the Company’s common stock price at the date of grant.

As of April 30, 2018, there was unrecognized stock-based compensation expense of $576,679 pursuant to the 2017 Plan based on the maximum performance award level. Such unrecognized stock-based compensation expense totaled $184,879 for the 2017 Plan at the minimum performance award level. The cost of these non-vested awards is expected to be recognized over a weighted-average period of three years for the 2017 Plan.

The Company recognized total stock-based compensation costs, which are reflected in operating expenses:

	Three Months Ended April 30,
	2018		2017
2012 Plan	$	—	$	206
2015 Plan		—		98,642
2017 Plan		119,240		—
Total stock-based compensation	$	119,240	$	98,848
Total income tax benefit recognized for stock-based compensation arrangements	$	25,040	$	35,585

									Outstanding
	Outstanding								Unvested
	Unvested		Granted		Becoming		Forfeited		Grants at
	Grants at		during		Vested during		during		Maximum at
	Maximum at		FY18 through		FY18 through		FY18 through		End of
Shares issued under	Beginning of		April 30,		April 30,		April 30,		April 30,
2017 Stock Plan	FY19		2018		2018		2018		2018
Restricted stock grants – employees		42,291		—		—		—		42,291
Restricted stock grants – non-employee directors		14,493		—		—		—		14,493
Retainer in stock – non-employee directors		12,789		5,328		—		—		18,117
Total restricted stock		69,573		5,328		—		—		74,901
Weighted average grant date fair value	$	13.63	$	12.95	$	—	$	—	$	13.58

Other Compensation Plans/Programs

Pursuant to the Company’s restrictive stock program, all directors are eligible to elect to receive any director fees in shares of restricted stock in lieu of cash. Such restricted shares are subject to a two-year vesting period. The valuation is based on the stock price at the grant date and is amortized to expense over the two-year period, which approximates the performance period. Since the director is giving up cash for unvested shares, and is subject to a vesting requirement, the amount of shares awarded is 133% of the cash amount based on the grant date stock price. As of April 30, 2018, unrecognized stock-based compensation expense related to these restricted stock awards totaled $39,987 for the 2017 Plan. The cost of these non-vested awards is expected to be recognized over a two-year weighted-average period. In addition, as of April 30, 2018 the Company granted awards for up to an aggregate 12,896 for the 2017 Plan.

Stock Repurchase Program

On July 19, 2016, the Company’s board of directors approved a stock repurchase program under which the Company may repurchase up to $2,500,000 of its outstanding common stock. The Company has not repurchased any stock under this program as of the date of this filing.

Warrant

In October 2014, the Company issued a five-year warrant that is immediately exercisable to purchase up to 55,500 shares of the Company’s common stock at an exercise price of $11.00 per share. As of April 30, 2018 and January 31, 2018, the warrant to purchase up to 55,500 shares remains outstanding.

Shelf Registration

On March 24, 2017, the Company filed a shelf registration statement on Form S-3 (File No. 333-216943) which was declared effective by the SEC on April 11, 2017 (the “Shelf Registration Statement”). The Shelf Registration Statement permits the Company to sell, from time to time, up to an aggregate of $30.0 million of various securities, including shares of common stock, shares of preferred stock, debt securities, warrants to purchase common stock, preferred stock, debt securities, and/or units, rights to purchase common stock, preferred stock, debt securities, warrants and/or units, units of two or more of the foregoing, or any combination of such securities, not to exceed one-third of the Company's public float in any 12-month period.

Public Offering

On August 17, 2017, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Roth Capital Partners, LLC and Craig-Hallum Capital Group LLC, as underwriters (collectively, the “Underwriters”), to issue and sell 725,000 shares of common stock, par value $0.01 per share (“Common Stock”), of the Company at a public offering price of $13.80 per share (the “Offering Price”) in a firm commitment underwritten public offering (the “Offering”). The underwriting discount was $0.966 per share sold in the Offering. The Offering with respect to the sale of the 725,000 shares of Common Stock closed on August 22, 2017. Pursuant to the Underwriting Agreement, the Underwriters had the option, exercisable for a period of 45-days after execution of the Underwriting Agreement, to purchase up to an additional 108,750 shares of the Common Stock at the Offering Price. In September 2017, the Underwriters exercised their option to purchase 83,750 shares of Common Stock. The net proceeds to the Company from the Offering, including the overallotment, were approximately $10.1 million, after deducting underwriting discounts and estimated offering expenses payable by the Company.

The offer and sale of shares of Common Stock in the Offering have been registered under the Securities Act of 1933, as amended, pursuant to the Shelf Registration Statement. The offer and sale of the shares of Common Stock in the Offering are described in the Company’s prospectus constituting a part of the Shelf Registration Statement, as supplemented by a final prospectus supplement filed with the Commission on August 18, 2017.

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Income Taxes

3 Months Ended

Apr. 30, 2018

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

8. Income Taxes

Change in Valuation Allowance

The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. The valuation allowance was $2.2 million at April 30, 2018 and January 31, 2018.

Income Tax Expense

Income tax expenses consist of federal, state and foreign income taxes. The statutory rate is the US rate. Reconciling items to the effective rate are foreign dividend income, foreign income subject to US tax, tax deductions for restricted stock vesting, company borrowing structures, and other permanent tax differences.

Tax Reform

On December 22, 2017, new federal tax reform legislation was enacted in the United States, resulting in significant changes from previous tax law.  The 2017 Tax Cuts and Jobs Act (the Tax Act) reduced the federal corporate income tax rate to 21% from 35% effective January 1, 2018.  As a result of the Tax Act, the Company applied a blended US statutory federal income tax rate of 33.81% for the year ended January 31, 2018. The Tax Act requires the Company to recognize the effect of the tax law changes in the period of enactment, such as determining the transition tax (see below), re-measuring the Company’s US deferred tax assets as well as reassessing the net realizability of the Company’s deferred tax assets. The Company completed this re-measurement and reassessment in the most recently completed fiscal year.

The Company previously considered substantially all of the earnings in their non-US subsidiaries to be indefinitely reinvested outside the US and, accordingly, recorded no deferred income taxes on such earnings.  At this time, and until the Company fully analyzes the applicable provisions of the Tax Act, the intention with respect to unremitted foreign earnings is to continue to indefinitely reinvest outside the US those earnings needed for working capital or additional foreign investment. Apart from the transition tax, any incremental deferred income taxes on the unremitted foreign earnings and profits are not expected to be material.

While the Tax Act provides for a modified territorial tax system, beginning in the fiscal year ending January 31, 2019, it includes two new US tax base erosion provisions, the Global Intangible Low-Taxed Income (“GILTI”) provisions and the Base-Erosion and Anti-Abuse Tax (“BEAT”) provisions. The GILTI provisions require the Company to include in its US income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets. The Company does not expect that the GILTI income inclusion will result in significant US tax beginning in the current fiscal year ending January 31, 2019. The BEAT provisions in the Tax Act eliminates the deduction of certain base-erosion payments made to related foreign corporations and impose a minimum tax if greater than regular tax. The Company does not expect that the BEAT provision will result in significant US tax beginning in FY19. In addition, the Company intends to account for the GILTI tax in the period in which it is incurred, and therefore has not provided any deferred tax impacts of GILTI in its unaudited condensed consolidated financial statements for the quarter ended April 30, 2018.

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Earnings Per Share

3 Months Ended

Apr. 30, 2018

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

9. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share at April 30, 2018 and 2017 as follows:

	Three Months Ended
	April 30,
	(in $000s except share and
	per share information)
	2018		2017
Numerator:
Net income	$	1,867	$	1,711
Denominator:
Denominator for basic earnings per share (weighted-average shares which reflect 356,441 shares in the treasury)		8,116,199		7,263,774
Effect of dilutive securities from restricted stock plan and from dilutive effect of stock options		44,181		89,886
Denominator for diluted earnings per share (adjusted weighted average shares)		8,160,380		7,353,660
Basic earnings per share	$	0.23	$	0.24
Diluted earnings per share	$	0.23	$	0.23

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Contingencies

3 Months Ended

Apr. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

10. Contingencies

 

Labor contingencies in Brazil

Lakeland and Lake Brasil Industria E Comercio de Roupas E Equipamentos de Protecao Individual LTDA (“Lakeland Brazil”), the Company’s former subsidiary, is currently named in four labor proceedings in Brazilian courts and, due to certain liability assumption provisions specified in the Shares Transfer Agreement.

The first case was initially filed in 2010 claiming US $100,000 owed to plaintiff. This case is on its final appeal to the Brazilian Supreme Court, having already been ruled upon in favor of Lakeland three times, most recently by the Labor Court Supreme Court. The claimant having lost four times previously, management firmly believes that Lakeland will continue to prevail in this case. A second case filed against Lakeland by a former principal in the Brazilian Company purchased by Lakeland, was filed in Labor court in 2014 claiming Lakeland owed US $300,000.  The Labor court ruled last month that the claimant’s case was outside of the scope of the Labor court and the case was dismissed. The claimant is appealing within the Labor court system. A third case filed by a former Lakeland Brazil manager in 2014 was ruled upon in civil court and awarded the claimant US $100K. Both the claimant and Lakeland have appealed this decision.  In the last case a former employee of our former Brazilian subsidiary filed a claim seeking approximately US $700,000 that he alleges is due him against an unpaid promissory note. Management firmly believes these claims to be without any merit and does not anticipate a negative outcome resulting in significant expense to us. The Company recorded a liability totaling $150,000 in the fiscal year ended January 31, 2018 to reflect this contingency. The accrual on the balance sheet at April 30, 2018 is $0.15 million.

General litigation contingencies:

The Company is involved in various litigation proceedings arising during the normal course of business which, in the opinion of the management of the Company, will not have a material effect on the Company’s financial position, results of operations or cash flows; however, there can be no assurance as to the ultimate outcome of these matters. As of April 30, 2018, to the best of the Company’s knowledge, there were no outstanding claims or litigation, except for the labor contingencies in Brazil described above.

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Segment Reporting

3 Months Ended

Apr. 30, 2018

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

11 . Segment Reporting

Domestic and international sales from continuing operations are as follows in millions of dollars:

	Three Months Ended April 30,
	2018				2017
Domestic	$	12.35	50.75	%	$	12.70	55.31	%
International		11.99	49.25	%		10.26	44.69	%
Total	$	24.34	100.00	%	$	22.96	100.00	%

The Company manages its operations by evaluating each of their geographic locations. The US operations include a facility in Alabama (primarily the distribution to customers of the bulk of our products and the light manufacturing of our chemical, wovens, reflective, and fire products). The Company also maintains one manufacturing company in China (primarily disposable and chemical suit production), a manufacturing facility in Mexico (primarily disposable, reflective, fire and chemical suit production) and a small manufacturing facility in India. The China facilities produce the majority of the Company’s products and China generates a significant portion of the Company’s international revenues. The Company evaluates the performance of these entities based on operating profit, which is defined as income before income taxes, interest expense and other income and expenses. The Company maintains sales forces in the USA, Canada, Mexico, Europe, Latin America, India, Russia, Kazakhstan and China, which sell and distribute products shipped from the United States, Mexico, India or China. The table below represents information about reported segments for the years noted therein:

	Three Months Ended April 30, (in millions of dollars)
	2018			2017
Net Sales:
USA	$	13.31		$	13.40
Other foreign		5.11			4.05
Europe (UK)		2.57			2.13
Mexico		1.47			0.92
China		13.83			10.52
Corporate		0.36			0.42
Less intersegment sales		(12.32	)		(8.48	)
Consolidated sales	$	24.34		$	22.96
External Sales:
USA	$	12.35		$	12.70
Other foreign		4.35			3.70
Europe (UK)		2.57			2.09
Mexico		1.11			0.57
China		3.95			3.90
Consolidated external sales	$	24.34		$	22.96
Intersegment Sales:
USA	$	0.96		$	0.70
Other foreign		0.76			0.35
Europe (UK)		—			0.04
Mexico		0.36			0.35
China		9.88			6.62
Corporate		0.36			0.42
Consolidated intersegment sales	$	12.32		$	8.48
Operating Profit (Loss):
USA	$	2.63		$	2.26
Other foreign		0.57			0.43
Europe (UK)		0.09			0.07
Mexico		0.13			0.03
China		0.58			0.97
Corporate		(1.79	)		(1.38	)
Less intersegment profit		0.21			0.09
Consolidated operating profit	$	2.42		$	2.47
Depreciation and Amortization Expense:
USA	$	0.03		$	0.03
Other foreign		0.04			0.04
Mexico		0.03			0.03
China		0.05			0.06
Corporate		0.05			0.04
Less intersegment		(0.01	)		(0.01	)
Consolidated depreciation &; amortization expense	$	0.19		$	0.19
Interest Expense:
Other foreign		0.02			0.02
China		—			—
Corporate		0.01			0.06
Consolidated interest expense	$	0.03		$	0.08
Income Tax Expense:
Other foreign		0.09			0.05
Europe (UK)		0.02			0.01
China		0.16			0.29
Corporate		0.19			0.32
Less intersegment		0.06			0.02
Consolidated income tax expense	$	0.52		$	0.69

	Three Months Ended April 30, (in millions of dollars)
Capital Expenditures:
USA	$	0.02		$	—
Mexico		0.08			0.01
China		0.18			0.02
India		0.04			—
Corporate		(0.05	)		0.11
Consolidated capital expenditures	$	0.27		$	0.14

	April 30, 2018 (in millions of dollars)			January 31, 2018 (in millions of dollars)
Total Assets:*
USA	$	69.00		$	67.02
Other foreign		20.61			20.30
Europe (UK)		4.38			4.63
Mexico		5.66			4.69
China		31.86			31.59
India		(0.81	)		(0.85	)
Corporate		20.96			22.27
Less intersegment		(54.39	)		(55.12	)
Consolidated assets	$	97.27		$	94.53
Total Assets Less Intersegment:*
USA	$	34.72		$	33.16
Other foreign		13.14			12.61
Europe (UK)		4.39			4.63
Mexico		5.76			4.84
China		19.14			16.97
India		1.10			0.98
Corporate		19.02			21.34
Consolidated assets	$	97.27		$	94.53
Property and Equipment (excluding assets held for sale at $0.2 million):
USA	$	1.99		$	1.99
Other foreign		1.40			1.50
Europe (UK)		0.02			0.03
Mexico		2.05			1.99
China		2.03			1.92
India		0.18			0.15
Corporate		1.10			1.18
Less intersegment		0.05			0.03
Consolidated property and equipment	$	8.82		$	8.79
Goodwill:
USA	$	0.87		$	0.87
Consolidated goodwill	$	0.87		$	0.87

*Negative assets reflect intersegment amounts eliminated in consolidation

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Apr. 30, 2018

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

Principles of Consolidation

 The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates and Assumptions

The preparation of the unaudited condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the balance sheet date, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. It is reasonably possible that events could occur during the upcoming year that could change such estimates.

Receivables, Policy [Policy Text Block]

Accounts Receivable, net

Trade accounts receivable are stated at the amount the Company expects to collect. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company recognizes losses when information available indicates that it is probable that a receivable has been impaired based on criteria noted in this paragraph at the date of the consolidated financial statements, and the amount of the loss can be reasonably estimated. Management considers the following factors when determining the collectability of specific customer accounts: Customer creditworthiness, past transaction history with the customers, current economic industry trends, changes in customer payment terms. Past due balances over 90 days and other less creditworthy accounts are reviewed individually for collectability. If the financial condition of the Company’s customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. Based on management’s assessment, the Company provides for estimated uncollectible amounts through a charge to earnings and a credit to a valuation allowance. Balances that remain outstanding after the Company has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable.

Inventory, Policy [Policy Text Block]

Inventories, net

Inventories include freight-in, materials, labor and overhead costs and are stated at the lower of cost (on a first-in, first-out basis) or net realizable value. Provision is made for slow-moving, obsolete or unusable inventory.

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

Impairment of Long-Lived Assets

The Company evaluates the carrying value of long-lived assets to be held and used when events or changes in circumstances indicate the carrying value may not be recoverable. The Company measures any potential impairment on a projected undiscounted cash flow method. Estimating future cash flows requires the Company’s management to make projections that can differ materially from actual results. The carrying value of a long-lived asset is considered impaired when the total projected undiscounted cash flows from the asset is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset.

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition

Substantially all of the Company’s revenue is derived from product sales, which consist of sales of the Company’s personal protective wear products to distributors. The Company considers purchase orders to be a contract with a customer. Contracts with customers are considered to be short-term when the time between order confirmation and satisfaction of the performance obligations is equal to or less than one year, and virtually all of the Company’s contracts are short-term. The Company recognizes revenue for the transfer of promised goods to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods. The Company typically satisfies its performance obligations in contracts with customers upon shipment of the goods. Generally, payment is due from customers within 30 to 90 days of the invoice date, and the contracts do not have significant financing components. The Company elected to account for shipping and handling activities as a fulfillment cost rather than a separate performance obligation. Shipping and handling costs associated with outbound freight are included in operating expenses, and for the quarters ended April 30, 2018 and 2017 aggregated approximately $0.6 million and $0.5 million, respectively. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenue.

The transaction price includes estimates of variable consideration, such as rebates, allowances, and discounts that are reductions in revenue. All estimates are based on the Company's historical experience, anticipated performance, and the Company's best judgment at the time the estimate is made. Estimates for variable consideration are reassessed each reporting period and are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur upon resolution of uncertainty associated with the variable consideration. All of the Company’s contracts have a single performance obligation satisfied at a point in time and the transaction price is stated in the contract, usually as quantity time’s price per unit.

The Company has five revenue generating reportable geographic segments under ASC Topic 280 “Segment Reporting” and derives its sales primarily from its limited use/disposable protective clothing and secondarily from its sales of reflective clothing, high-end chemical protective suits, firefighting and heat protective apparel, reusable woven garments and gloves and arm guards. The Company believes disaggregation of revenue by geographic region best depicts the nature, amount, timing, and uncertainty of its revenue and cash flows. Net sales by geographic region are included below:

	Three Months Ended
	April 30,
	(in millions of dollars)
	2018		2017
External Sales:
USA	$	12.35	$	12.70
Other foreign		4.35		3.70
Europe (UK)		2.57		2.09
Mexico		1.11		0.57
China		3.95		3.90
Consolidated external sales	$	24.34	$	22.96

Income Tax, Policy [Policy Text Block]

Income Taxes

The Company is required to estimate its income taxes in each of the jurisdictions in which it operates as part of preparing the unaudited condensed consolidated financial statements. This involves estimating the actual current tax in addition to assessing temporary differences resulting from differing treatments for tax and financial accounting purposes. These differences, together with net operating loss carryforwards and tax credits, are recorded as deferred tax assets or liabilities on the Company’s unaudited condensed consolidated balance sheet. A judgment must then be made of the likelihood that any deferred tax assets will be recovered from future taxable income. A valuation allowance may be required to reduce deferred tax assets to the amount that is more likely than not to be realized. In the event the Company determines that it may not be able to realize all or part of its deferred tax asset in the future, or that new estimates indicate that a previously recorded valuation allowance is no longer required, an adjustment to the deferred tax asset is charged or credited to income in the period of such determination.

The Company recognizes tax positions that meet a “more likely than not” minimum recognition threshold. If necessary, the Company recognizes interest and penalties associated with tax matters as part of the income tax provision and would include accrued interest and penalties with the related tax liability in the unaudited condensed consolidated balance sheets.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign Operations and Foreign Currency Translation

The Company maintains manufacturing operations in Mexico, India, Argentina and the People’s Republic of China and can access independent contractors in China, Vietnam, Argentina and Mexico. It also maintains sales and distribution entities located in India, Canada, the U.K., Chile, China, Argentina, Russia, Kazakhstan and Mexico. The Company is vulnerable to currency risks in these countries. The functional currency for the United Kingdom subsidiary is the Euro; the trading company in China, the RMB; the Canadian Real Estate subsidiary, the Canadian dollar; the Russian operation, the Russian Ruble; the Kazakhstan operation the Kazakhstan Tenge and the Vietnam operation, the Vietnam Dong. All other operations have the US dollar as its functional currency.

Pursuant to US GAAP, assets and liabilities of the Company’s foreign operations with functional currencies, other than the US dollar, are translated at the exchange rate in effect at the balance sheet date, while revenues and expenses are translated at average rates prevailing during the periods. Translation adjustments are reported in accumulated other comprehensive loss, a separate component of stockholders’ equity. Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the unaudited condensed consolidated statement of cash flows will not necessarily agree with changes in the corresponding balances on the unaudited condensed consolidated balance sheet. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Foreign currency transaction losses included in net income for the three months ended April 30, 2018 was approximately $243,000 and for the three months ended April 30, 2017 was approximately $65,000.

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair Value of Financial Instruments 

US GAAP defines fair value, provides guidance for measuring fair value and requires certain disclosures utilizing a fair value hierarchy which is categorized into three levels based on the inputs to the valuation techniques used to measure fair value.

The following is a brief description of those three levels:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2:  Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3:  Unobservable inputs that reflect management’s own assumptions.

The financial instruments of the Company classified as current assets or liabilities, including cash and cash equivalents, accounts receivable, short-term borrowings, borrowings under revolving credit facility, accounts payable and accrued expenses, are recorded at carrying value, which approximates fair value based on the short-term nature of these instruments.

The Company believes that the fair values of its long-term debt approximates its carrying value based on the effective interest rate compared to the current market rate available to the Company.

Earnings Per Share, Policy [Policy Text Block]

Earnings Per Share

Basic earnings per share are based on the weighted average number of common shares outstanding without consideration of common stock equivalents. Diluted earnings per share are based on the weighted average number of common shares and common stock equivalents. The diluted earnings per share calculation takes into account unvested restricted shares and the shares that may be issued upon exercise of stock options, reduced by shares that may be repurchased with the funds received from the exercise, based on the average price during the period.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued.

New Accounting Pronouncements Recently Adopted

In May 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting.” The amendment amends the scope of modification accounting for share-based payment arrangements, provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718. For all entities, the ASU is effective for annual reporting periods, including interim periods within those annual reporting periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period. The Company will apply the amendments in this update prospectively to an award modified on or after February 1, 2018 and does not expect that application of this guidance will have a material impact on its unaudited condensed consolidated financial statements and related disclosures.

As disclosed in Revenue Recognition above, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) effective February 1, 2018 using the retrospective transition method. This new accounting standard outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers. This standard supersedes existing revenue recognition requirements and eliminates most industry-specific guidance from US GAAP. The core principle of the new accounting standard is to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the adoption of this new accounting standard resulted in increased disclosure, including qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, the Company elected to account for shipping and handling activities as a fulfillment cost rather than a separate performance obligation. Adoption of this standard did not result in significant changes to the Company’s accounting policies, business processes, systems or controls, or have a material impact on the Company’s financial position, results of operations and cash flows or related disclosures. As such, prior period financial statements were not recast.

New Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). ASU 2016-02 requires lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early application is permitted for all entities. ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into after, the date of initial application, with an option to elect to use certain transition relief. The Company is currently evaluating the impact of this new standard on its unaudited condensed consolidated financial statements but has not determined the effects that the adoption of the pronouncement may have on its unaudited condensed consolidated financial statements and related disclosures.

In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income,” which allows institutions to elect to reclassify the stranded tax effects from AOCI to retained earnings, limited only to amounts in AOCI that are affected by the tax reform law. For public entities, the amendments are effective for annual reporting periods beginning after December 15, 2018, including interim reporting periods within that reporting period. For all other entities, the amendments in this Update are effective for annual reporting periods beginning after December 15, 2019, including interim reporting periods within that reporting period. The Company does not expect that adoption of this guidance will have a material impact on its unaudited condensed consolidated financial statements and related disclosures.

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Summary of Significant Accounting Policies (Tables)

3 Months Ended

Apr. 30, 2018

Accounting Policies [Abstract]

Long-lived Assets by Geographic Areas [Table Text Block]

Net sales by geographic region are included below:

	Three Months Ended
	April 30,
	(in millions of dollars)
	2018		2017
External Sales:
USA	$	12.35	$	12.70
Other foreign		4.35		3.70
Europe (UK)		2.57		2.09
Mexico		1.11		0.57
China		3.95		3.90
Consolidated external sales	$	24.34	$	22.96

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Inventories, net (Tables)

3 Months Ended

Apr. 30, 2018

Inventory Disclosure [Abstract]

Schedule of Inventory, Current [Table Text Block]

	April 30, 2018		January 31, 2018
Raw materials	$	14,172	$	14,767
Work-in-process		2,235		2,357
Finished goods		28,004		25,795
	$	44,411	$	42,919

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Long-Term Debt (Tables)

3 Months Ended

Apr. 30, 2018

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments [Table Text Block]

Below is a table to summarize the debt amounts above (in 000’s):

									Current Maturity of
	Short-Term				Long-term				Long-term
	4/30/2018		1/31/2018		4/30/2018		1/31/2018		4/30/2018		1/31/2018
Argentina	$	177	$	31	$	—	$	—	$	—	$	—
UK		—		180		—		—		—		—
USA		—		—		1,273		1,312		158		158
Totals	$	177	$	211	$	1,273	$	1,312	$	158	$	158

Schedule of Maturities of Long-term Debt [Table Text Block]

This schedule reflects the liabilities as of April 30, 2018, and does not reflect any subsequent event (in 000’s):

													After
			1 Year		2		3		4		5		5
	Total		or less		Years		Years		Years		Years		Years
Borrowings in USA	$	1,431	$	158	$	158	$	1,115	$	—	$	—	$	—
Borrowings in Argentina		177		177		—		—		—		—		—
Total	$	1,608	$	335	$	158	$	1,115	$	—	$	—	$	—

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Stockholders’ Equity (Tables)

3 Months Ended

Apr. 30, 2018

Equity [Abstract]

Schedule of Nonvested Share Activity [Table Text Block]

The following table summarizes the unvested shares granted on September 12, 2017, which have been made under the 2017 Plan.

	Number of shares awarded total
	Minimum		Target		Maximum		Cap
Employees		21,145		31,718		42,291		50,748
Non-Employee Directors		7,246		10,870		14,493		17,391
Total		28,391		42,588		56,784		68,139

	Value at grant date (numbers below are rounded to the nearest $100)
	Minimum		Target		Maximum		Cap
Employees	$	291,800	$	437,700	$	583,600	$	700,300
Non-Employee Directors		100,000		150,000		200,000		240,000
Total	$	391,800	$	587,700	$	783,600	$	940,300

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]

The Company recognized total stock-based compensation costs, which are reflected in operating expenses:

	Three Months Ended April 30,
	2018		2017
2012 Plan	$	—	$	206
2015 Plan		—		98,642
2017 Plan		119,240		—
Total stock-based compensation	$	119,240	$	98,848
Total income tax benefit recognized for stock-based compensation arrangements	$	25,040	$	35,585

Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block]

									Outstanding
	Outstanding								Unvested
	Unvested		Granted		Becoming		Forfeited		Grants at
	Grants at		during		Vested during		during		Maximum at
	Maximum at		FY18 through		FY18 through		FY18 through		End of
Shares issued under	Beginning of		April 30,		April 30,		April 30,		April 30,
2017 Stock Plan	FY19		2018		2018		2018		2018
Restricted stock grants – employees		42,291		—		—		—		42,291
Restricted stock grants – non-employee directors		14,493		—		—		—		14,493
Retainer in stock – non-employee directors		12,789		5,328		—		—		18,117
Total restricted stock		69,573		5,328		—		—		74,901
Weighted average grant date fair value	$	13.63	$	12.95	$	—	$	—	$	13.58

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Earnings Per Share (Tables)

3 Months Ended

Apr. 30, 2018

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

The following table sets forth the computation of basic and diluted earnings per share at April 30, 2018 and 2017 as follows:

	Three Months Ended
	April 30,
	(in $000s except share and
	per share information)
	2018		2017
Numerator:
Net income	$	1,867	$	1,711
Denominator:
Denominator for basic earnings per share (weighted-average shares which reflect 356,441 shares in the treasury)		8,116,199		7,263,774
Effect of dilutive securities from restricted stock plan and from dilutive effect of stock options		44,181		89,886
Denominator for diluted earnings per share (adjusted weighted average shares)		8,160,380		7,353,660
Basic earnings per share	$	0.23	$	0.24
Diluted earnings per share	$	0.23	$	0.23

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Segment Reporting (Tables)

3 Months Ended

Apr. 30, 2018

Segment Reporting [Abstract]

Schedule Of Revenue From External Customers Geographic Areas [Table Text Block]

Domestic and international sales from continuing operations are as follows in millions of dollars:

	Three Months Ended April 30,
	2018				2017
Domestic	$	12.35	50.75	%	$	12.70	55.31	%
International		11.99	49.25	%		10.26	44.69	%
Total	$	24.34	100.00	%	$	22.96	100.00	%

Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block]

The table below represents information about reported segments for the years noted therein:

	Three Months Ended
	April 30,
	(in millions of dollars)
	2018		2017
Net Sales:
USA	$	13.31	$	13.40
Other foreign		5.11		4.05
Europe (UK)		2.57		2.13
Mexico		1.47		0.92
China		13.83		10.52
Corporate		0.36		0.42
Less intersegment sales		(12.32)		(8.48)
Consolidated sales	$	24.34	$	22.96
External Sales:
USA	$	12.35	$	12.70
Other foreign		4.35		3.70
Europe (UK)		2.57		2.09
Mexico		1.11		0.57
China		3.95		3.90
Consolidated external sales	$	24.34	$	22.96
Intersegment Sales:
USA	$	0.96	$	0.70
Other foreign		0.76		0.35
Europe (UK)		—		0.04
Mexico		0.36		0.35
China		9.88		6.62
Corporate		0.36		0.42
Consolidated intersegment sales	$	12.32	$	8.48

	Three Months Ended
	April 30,
	(in millions of dollars)
	2018		2017
Operating Profit (Loss):
USA	$	2.63	$	2.26
Other foreign		0.57		0.43
Europe (UK)		0.09		0.07
Mexico		0.13		0.03
China		0.58		0.97
Corporate		(1.79)		(1.38)
Less intersegment profit		0.21		0.09
Consolidated operating profit	$	2.42	$	2.47
Depreciation and Amortization Expense:
USA	$	0.03	$	0.03
Other foreign		0.04		0.04
Mexico		0.03		0.03
China		0.05		0.06
Corporate		0.05		0.04
Less intersegment		(0.01)		(0.01)
Consolidated depreciation &; amortization expense	$	0.19	$	0.19
Interest Expense:
Other foreign		0.02		0.02
China		—		—
Corporate		0.01		0.06
Consolidated interest expense	$	0.03	$	0.08
Income Tax Expense:
Other foreign		0.09		0.05
Europe (UK)		0.02		0.01
China		0.16		0.29
Corporate		0.19		0.32
Less intersegment		0.06		0.02
Consolidated income tax expense	$	0.52	$	0.69
Capital Expenditures:
USA	$	0.02	$	—
Mexico		0.08		0.01
China		0.18		0.02
India		0.04		—
Corporate		(0.05)		0.11
Consolidated capital expenditures	$	0.27	$	0.14

	April 30, 2018		January 31, 2018
	(in millions of dollars)		(in millions of dollars)
Total Assets:*
USA	$	69.00	$	67.02
Other foreign		20.61		20.30
Europe (UK)		4.38		4.63
Mexico		5.66		4.69
China		31.86		31.59
India		(0.81)		(0.85)
Corporate		20.96		22.27
Less intersegment		(54.39)		(55.12)
Consolidated assets	$	97.27	$	94.53
Total Assets Less Intersegment:*
USA	$	34.72	$	33.16
Other foreign		13.14		12.61
Europe (UK)		4.39		4.63
Mexico		5.76		4.84
China		19.14		16.97
India		1.10		0.98
Corporate		19.02		21.34
Consolidated assets	$	97.27	$	94.53
Property and Equipment (excluding assets held for sale at $0.2 million):
USA	$	1.99	$	1.99
Other foreign		1.40		1.50
Europe (UK)		0.02		0.03
Mexico		2.05		1.99
China		2.03		1.92
India		0.18		0.15
Corporate		1.10		1.18
Less intersegment		0.05		0.03
Consolidated property and equipment	$	8.82	$	8.79
Goodwill:
USA	$	0.87	$	0.87
Consolidated goodwill	$	0.87	$	0.87

*Negative assets reflect intersegment amounts eliminated in consolidation

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Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2018	Apr. 30, 2017
Sales Revenue, Goods, Net [Abstract]
Sales Revenue, Goods, Net	$ 24,344	$ 22,961
External Sales [Member]
Sales Revenue, Goods, Net [Abstract]
Sales Revenue, Goods, Net	24,340	22,960
USA [Member]
Sales Revenue, Goods, Net [Abstract]
Sales Revenue, Goods, Net	13,310	13,400
USA [Member] | External Sales [Member]
Sales Revenue, Goods, Net [Abstract]
Sales Revenue, Goods, Net	12,350	12,700
Other foreign [Member]
Sales Revenue, Goods, Net [Abstract]
Sales Revenue, Goods, Net	5,110	4,050
Other foreign [Member] | External Sales [Member]
Sales Revenue, Goods, Net [Abstract]
Sales Revenue, Goods, Net	4,350	3,700
Europe (UK) [Member]
Sales Revenue, Goods, Net [Abstract]
Sales Revenue, Goods, Net	2,570	2,130
Europe (UK) [Member] | External Sales [Member]
Sales Revenue, Goods, Net [Abstract]
Sales Revenue, Goods, Net	2,570	2,090
Mexico [Member]
Sales Revenue, Goods, Net [Abstract]
Sales Revenue, Goods, Net	1,470	920
Mexico [Member] | External Sales [Member]
Sales Revenue, Goods, Net [Abstract]
Sales Revenue, Goods, Net	1,110	570
CHINA [Member]
Sales Revenue, Goods, Net [Abstract]
Sales Revenue, Goods, Net	13,830	10,520
CHINA [Member] | External Sales [Member]
Sales Revenue, Goods, Net [Abstract]
Sales Revenue, Goods, Net	$ 3,950	$ 3,900

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Summary of Significant Accounting Policies (Details Textual) - USD ($)	3 Months Ended
	Apr. 30, 2018	Apr. 30, 2017
Business And Significant Accounting Policies [Line Items]
Shipping, Handling and Transportation Costs	$ 600,000	$ 500,000
Foreign Currency Transaction Gain (Loss), Realized	$ 243,000	$ 65,000

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Inventories, net (Details) - USD ($) $ in Thousands	Apr. 30, 2018	Jan. 31, 2018
Inventory [Line Items]
Raw materials	$ 14,172	$ 14,767
Work-in-process	2,235	2,357
Finished goods	28,004	25,795
Inventory, Net, Total	$ 44,411	$ 42,919

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Long-Term Debt (Details) - USD ($) $ in Thousands	Apr. 30, 2018	Jan. 31, 2018
Short-Term Debt	$ 177	$ 211
Long-Term Debt, Excluding Current Maturities	1,273	1,312
Long-Term Debt, Current Maturities	158	158
ARGENTINA
Short-Term Debt	177	31
Long-Term Debt, Excluding Current Maturities	0	0
Long-Term Debt, Current Maturities	0	0
UK
Short-Term Debt	0	180
Long-Term Debt, Excluding Current Maturities	0	0
Long-Term Debt, Current Maturities	0	0
USA [Member]
Short-Term Debt	0	0
Long-Term Debt, Excluding Current Maturities	1,273	1,312
Long-Term Debt, Current Maturities	$ 158	$ 158

XML

Long-Term Debt (Details 1) $ in Thousands	Apr. 30, 2018 USD ($)
Debt Instrument [Line Items]
Total	$ 1,608
1 Year or less	335
2 Years	158
3 Years	1,115
4 Years	0
5 Years	0
After 5 Years	0
Borrowings In USA [Member]
Debt Instrument [Line Items]
Total	1,431
1 Year or less	158
2 Years	158
3 Years	1,115
4 Years	0
5 Years	0
After 5 Years	0
Borrowings in Argentina [Member]
Debt Instrument [Line Items]
Total	177
1 Year or less	177
2 Years	0
3 Years	0
4 Years	0
5 Years	0
After 5 Years	$ 0

XML

Long-Term Debt (Details Textual)		1 Months Ended
	May 10, 2017 USD ($)	Jan. 31, 2017	Dec. 31, 2016	Dec. 31, 2014 USD ($)	Sep. 30, 2013 USD ($)	Sep. 30, 2013 CAD ($)	Apr. 30, 2018 USD ($)	Apr. 30, 2018 ARS ($)	Feb. 26, 2018 USD ($)	Feb. 26, 2018 ARS ($)	Jan. 31, 2018 USD ($)	Jun. 28, 2017	May 19, 2017 USD ($)	May 19, 2017 ARS ($)	Jul. 01, 2016 USD ($)	Jul. 01, 2016 ARS ($)	Apr. 30, 2015 USD ($)	Dec. 31, 2014 GBP (£)	Jun. 28, 2013 USD ($)
Debt Instrument [Line Items]
Line of Credit Facility, Interest Rate Description	For that portion of the term loan that consists of Eurodollar loans, the term loan shall bear interest at the LIBOR Market Index Rate (LIBOR) plus 2.0% per annum, and for that portion of the term loan that consists of base rate loans, the term loan shall bear interest at the base rate then in effect plus 1.0% per annum. All principal and unpaid accrued interest under the revolver credit facility shall be due and payable on the maturity date of the revolver. For that portion of the revolver loan that consists of Eurodollar loans, the revolver shall bear interest at LIBOR plus a margin rate of 1.75% per annum for the first six months and thereafter between 1.5% and 2.0%, depending on the Companys availability calculation (as defined in the Loan Agreement) and, for that portion of the revolver that consists of base rate loans, the revolver shall bear interest at the base rate then in effect plus a margin rate of 0.75% per annum for the first six months and thereafter between 0.50% and 1.0%, depending on the availability calculation. As of the closing, the Company elected all borrowings under the Loan Agreement to accrue interest at LIBOR which, as of that date, was 0.99500%. As such, the initial rate of interest for the revolver is 2.745% per annum and the initial rate of interest for the term loan is 2.995% per annum. The Loan Agreement provides for payment of an unused line fee of between 0.25% and 0.50%, depending on the amount by which the revolving credit loan commitment exceeds the amount of the revolving credit loans outstanding (including letters of credit), which shall be payable monthly in arrears on the average daily unused portion of the revolver.
Short-term Debt							$ 177,000				$ 211,000
Argentina Loan [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage									0.00%	0.00%			20.00%	20.00%	27.06%	27.06%
Long-term Line of Credit							7,000	$ 3,500,000	$ 215,000,000,000	$ 4,300,000			$ 112,000	$ 1,800,000	$ 38,000	$ 569,000
Argentina Loan One [Member]
Debt Instrument [Line Items]
Long-term Line of Credit								$ 200,000
Argentina Subsidiary [Member]
Debt Instrument [Line Items]
Long-term Line of Credit							177,000										$ 300,000
Borrowings In UK [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity				$ 1,900,000														£ 1,250,000
Line Of Credit Facility Advance Rate				3.46%
Short-term Debt							$ 0				$ 200,000
Notes Payable				$ 600,000														400,000
Service Charge Percentage		0.85%	0.90%
Borrowings In UK [Member] | Amendment [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity				$ 2,300,000														£ 1,500,000
Line Of Credit Facility Advance Rate				3.00%
Senior Loan Agreement [Member]
Debt Instrument [Line Items]
Long-term Line of Credit																			$ 15,000,000
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Interest Rate at Period End												4.25%
Revolving Credit Facility [Member] | Sun Trust Bank [Member]
Debt Instrument [Line Items]
Line Of Credit Facility, Borrowing Base Calculation, Percentage Of Accounts Receivable	85.00%
Line of Credit Facility, Maximum Borrowing Capacity	$ 30,000,000
Long-term Line of Credit	20,000,000
Line of Credit Facility, Periodic Payment	13,125
Line of Credit Facility Increase Limit	10,000,000
Line Of Credit Facility Borrowing Base Commitment Amount	$ 1,500,000
Line Of Credit Facility Borrowing Base Commitment Percentage	7.50%
Line of Credit Facility, Date of First Required Payment	Jun. 01, 2017
Revolving Credit Facility [Member] | AloStar Bank of Commerce [Member]
Debt Instrument [Line Items]
Repayments of Long-term Lines of Credit	$ 3,000,000
Term Loan [Member] | Sun Trust Bank [Member]
Debt Instrument [Line Items]
Long-term Line of Credit	1,575,000
Business Development Bank Of Canada [Member]
Debt Instrument [Line Items]
Short-term Debt, Refinanced, Amount					$ 1,100,000
Debt Instrument, Term					240 months	240 months
Debt Instrument, Interest Rate, Effective Percentage					6.45%	6.45%
Debt Instrument, Periodic Payment					$ 6,048	$ 8,169
Letter of Credit [Member] | Sun Trust Bank [Member]
Debt Instrument [Line Items]
Long-term Line of Credit	$ 5,000,000

XML

Concentration of Risk (Details Textual) - USD ($) $ in Millions	3 Months Ended
	Apr. 30, 2018	Apr. 30, 2017
UNITED STATES
Concentration Risk [Line Items]
Interest-bearing Deposits in Banks and Other Financial Institutions	$ 9.6
Foreign Countries [Member]
Concentration Risk [Line Items]
Interest-bearing Deposits in Banks and Other Financial Institutions	$ 6.7
Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration Risk, Customer	No customer accounted for more than 10% of net sales	No customer accounted for more than 10% of net sales
Supplier Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration Risk, Supplier	No supplier for more than 10% of purchases	No supplier for more than 10% of purchases

XML

Stockholders’ Equity (Details)	12 Months Ended
	Jan. 31, 2018 USD ($) shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares awarded total (Shares) | shares	68,139
Value at grant date | $	$ 940,300
Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares awarded total (Shares) | shares	50,748
Value at grant date | $	$ 700,300
Non-Employee Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares awarded total (Shares) | shares	17,391
Value at grant date | $	$ 240,000
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares awarded total (Shares) | shares	28,391
Value at grant date | $	$ 391,800
Minimum [Member] | Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares awarded total (Shares) | shares	21,145
Value at grant date | $	$ 291,800
Minimum [Member] | Non-Employee Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares awarded total (Shares) | shares	7,246
Value at grant date | $	$ 100,000
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares awarded total (Shares) | shares	56,784
Value at grant date | $	$ 783,600
Maximum [Member] | Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares awarded total (Shares) | shares	42,291
Value at grant date | $	$ 583,600
Maximum [Member] | Non-Employee Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares awarded total (Shares) | shares	14,493
Value at grant date | $	$ 200,000
Weighted Average [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares awarded total (Shares) | shares	42,588
Value at grant date | $	$ 587,700
Weighted Average [Member] | Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares awarded total (Shares) | shares	31,718
Value at grant date | $	$ 437,700
Weighted Average [Member] | Non-Employee Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares awarded total (Shares) | shares	10,870
Value at grant date | $	$ 150,000

XML

Stockholders’ Equity (Details 1) - USD ($)	3 Months Ended
	Apr. 30, 2018	Apr. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation	$ 119,240	$ 98,848
Total income tax benefit recognized for stock-based compensation arrangements	25,040	35,585
2012 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation	0	206
2015 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation	0	98,642
2017 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation	$ 119,240	$ 0

XML

Stockholders’ Equity (Details 2) - $ / shares	1 Months Ended	3 Months Ended
	Aug. 17, 2017	Apr. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding Unvested Grants at Maximum at Beginning of FY19, restricted stock		69,573
Granted during FY18 through April 30, 2018		5,328
Becoming Vested during FY18 through April 30, 2018		0
Reallocation by Board of Directors	108,750
Forfeited during FY18 through April 30, 2018		0
Outstanding Unvested Grants at Maximum at End of FY19, restricted stock		74,901
Outstanding Unvested Grants at Maximum at Beginning of FY19, Weighted average grant date fair value (in dollars per share)		$ 13.63
Granted during FY18, Weighted average grant date fair value (in dollars per share)		12.95
Becoming Vested during FY18, Weighted average grant date fair value (in dollars per share)		0
Forfeited during FY18, Weighted average grant date fair value (in dollars per share)		0
Outstanding Unvested Grants at Maximum at End of FY19, Weighted average grant date fair value (in dollars per share)		$ 13.58
Restricted Stock Grants - Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding Unvested Grants at Maximum at Beginning of FY19, restricted stock		42,291
Granted during FY18 through April 30, 2018		0
Becoming Vested during FY18 through April 30, 2018		0
Forfeited during FY18 through April 30, 2018		0
Outstanding Unvested Grants at Maximum at End of FY19, restricted stock		42,291
Restricted Stock Grants - Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding Unvested Grants at Maximum at Beginning of FY19, restricted stock		14,493
Granted during FY18 through April 30, 2018		0
Becoming Vested during FY18 through April 30, 2018		0
Forfeited during FY18 through April 30, 2018		0
Outstanding Unvested Grants at Maximum at End of FY19, restricted stock		14,493
Retainer in stock - directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding Unvested Grants at Maximum at Beginning of FY19, restricted stock		12,789
Granted during FY18 through April 30, 2018		5,328
Becoming Vested during FY18 through April 30, 2018		0
Forfeited during FY18 through April 30, 2018		0
Outstanding Unvested Grants at Maximum at End of FY19, restricted stock		18,117

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Stockholders’ Equity (Details Textual) - USD ($)	1 Months Ended		3 Months Ended	12 Months Ended
	Sep. 30, 2017	Aug. 17, 2017	Apr. 30, 2018	Jan. 31, 2018	Jun. 21, 2017	Mar. 24, 2017	Jul. 19, 2016	Oct. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross				68,139
Stock Repurchase Program, Authorized Amount							$ 2,500,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights								55,500
Class of Warrant or Right, Exercise Price of Warrants or Rights								$ 11.00
Class of Warrant or Right, Outstanding			55,500	55,500
Common Stock, Shares, Issued			8,472,640	8,472,640	360,000
Common Stock, Par Or Stated Value Per Share		$ 0.01	$ 0.01	$ 0.01
Shares Issued, Price Per Share		$ 13.80	$ 13.80
Share Based Compensation Arrangements By Share Based Payment Award Market Liability			$ 0	$ 1,913
Number Of Share To Beissued Under Under Writing Agreement		725,000
Underwriting Discount Per Share Sold		$ 0.966
Net Proceeds From Issuance Of Common Stock After Deducting Underwriting Discounts And Estimated Offering Expenses		$ 10,100,000
Shelf Registration Statement, Maximum Amount Authorized						$ 30,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized		108,750
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross				56,784
2012 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant			310,000
2012 Plan [Member] | Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares			293,887
2015 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common Stock, Capital Shares Reserved for Future Issuance			100,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares			67,000
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures			43,029
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period			23,971
Bonus-in-stock program [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-Based Compensation Arrangement By Share-Based Payment Award, Purchase Price Of Common Stock, Percent			133.00%
2017 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee Service Share-Based Compensation, Nonvested Awards, Total Compensation Cost Not Yet Recognized, Stock Options At Base Line Performance			$ 576,679
Restricted Stock [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross			56,784
Restricted Stock [Member] | 2017 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross			12,896
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Total			$ 39,987
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options			$ 184,879
Stock Appreciation Rights [Member] | 2017 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross			6,376
Performance Based Restricted Stock [Member] | 2017 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted Stock or Unit Expense			$ 65,824
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Shares, New Issues	83,750

XML

Income Taxes (Details Textual) - USD ($) $ in Millions	12 Months Ended
	Jan. 31, 2019	Jan. 31, 2018	Apr. 30, 2018
Income Taxes [Line Items]
Deferred Tax Assets, Valuation Allowance, Noncurrent		$ 2.2	$ 2.2
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent		33.81%
Scenario, Plan [Member]
Income Taxes [Line Items]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	21.00%
Maximum [Member]
Income Taxes [Line Items]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent		35.00%

XML

Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Apr. 30, 2018	Apr. 30, 2017
Numerator:
Net income	$ 1,867	$ 1,711
Denominator:
Denominator for basic earnings per share (weighted-average shares which reflect 356,441 shares in the treasury)	8,116,199	7,263,774
Effect of dilutive securities from restricted stock plan and from dilutive effect of stock options	44,181	89,886
Denominator for diluted earnings per share (adjusted weighted average shares)	8,160,380	7,353,660
Basic earnings per share (in dollars per share)	$ 0.23	$ 0.24
Diluted earnings per share (in dollars per share)	$ 0.23	$ 0.23

XML

Contingencies (Details Textual) - USD ($)	3 Months Ended
	Apr. 30, 2018	Jan. 31, 2018
Contingencies (Line Items)
Loss Contingency Accrual	$ 150,000	$ 150,000
Loss Contingency,First Case [Member]
Contingencies (Line Items)
Loss Contingency Damages Sought Value	100,000
Loss Contingency,Second Case [Member]
Contingencies (Line Items)
Loss Contingency Damages Sought Value	300,000
Loss Contingency,Third Case [Member]
Contingencies (Line Items)
Loss Contingency, Damages Awarded, Value	100,000
Lakeland Brazil [Member]
Contingencies (Line Items)
Loss Contingency, Damages Sought, Value	$ 700,000

XML

Segment Reporting (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2018	Apr. 30, 2017
Segment Reporting Information [Line Items]
Net sales	$ 24,344	$ 22,961
Domestic [Member]
Segment Reporting Information [Line Items]
Net sales	$ 12,350	$ 12,700
Sales Revenue, Percentage	50.75%	55.31%
International [Member]
Segment Reporting Information [Line Items]
Net sales	$ 11,990	$ 10,260
Sales Revenue, Percentage	49.25%	44.69%
Sales Revenue, Net [Member]
Segment Reporting Information [Line Items]
Net sales	$ 24,340	$ 22,960
Sales Revenue, Percentage	100.00%	100.00%

XML

Segment Reporting (Details 1) - USD ($) $ in Thousands		3 Months Ended
		Apr. 30, 2018	Apr. 30, 2017	Jan. 31, 2018
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales		$ 24,344	$ 22,961
Operating Profit (Loss)		2,416	2,473
Depreciation and Amortization Expense		187	186
Interest Expense		31	76
Income Tax Expense (Benefits)		517	688
Total assets	[1]	97,272		$ 94,531
Assets Less Intersegment	[1]	97,270		94,530
Property and Equipment		8,821		8,789
Capital Expenditures		270	140
Goodwill		871		871
Intersegment Sales [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales		(12,320)	(8,480)
External Sales [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales		24,340	22,960
Intersegment Eliminations [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales		12,320	8,480
Operating Profit (Loss)		210	90
Depreciation and Amortization Expense		(10)	(10)
Income Tax Expense (Benefits)		60	20
Total assets	[1]	(54,390)		(55,120)
Property and Equipment		50		30
USA [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales		13,310	13,400
Operating Profit (Loss)		2,630	2,260
Depreciation and Amortization Expense		30	30
Total assets	[1]	69,000		67,020
Assets Less Intersegment	[1]	34,720		33,160
Property and Equipment		1,990		1,990
Capital Expenditures		20	0
Goodwill		870		870
USA [Member] | Intersegment Sales [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales		960	700
USA [Member] | External Sales [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales		12,350	12,700
Other foreign [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales		5,110	4,050
Operating Profit (Loss)		570	430
Depreciation and Amortization Expense		40	40
Interest Expense		20	20
Income Tax Expense (Benefits)		90	50
Total assets	[1]	20,610		20,300
Assets Less Intersegment	[1]	13,140		12,610
Property and Equipment		1,400		1,500
Other foreign [Member] | Intersegment Sales [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales		760	350
Other foreign [Member] | External Sales [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales		4,350	3,700
Europe (UK) [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales		2,570	2,130
Operating Profit (Loss)		90	70
Income Tax Expense (Benefits)		20	10
Total assets	[1]	4,380		4,630
Assets Less Intersegment	[1]	4,390		4,630
Property and Equipment		20		30
Europe (UK) [Member] | Intersegment Sales [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales		0	40
Europe (UK) [Member] | External Sales [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales		2,570	2,090
Mexico [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales		1,470	920
Operating Profit (Loss)		130	30
Depreciation and Amortization Expense		30	30
Total assets	[1]	5,660		4,690
Assets Less Intersegment	[1]	5,760		4,840
Property and Equipment		2,050		1,990
Capital Expenditures		80	10
Mexico [Member] | Intersegment Sales [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales		360	350
Mexico [Member] | External Sales [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales		1,110	570
China [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales		13,830	10,520
Operating Profit (Loss)		580	970
Depreciation and Amortization Expense		50	60
Interest Expense		0	0
Income Tax Expense (Benefits)		160	290
Total assets	[1]	31,860		31,590
Assets Less Intersegment	[1]	19,140		16,970
Property and Equipment		2,030		1,920
Capital Expenditures		180	20
China [Member] | Intersegment Sales [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales		9,880	6,620
China [Member] | External Sales [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales		3,950	3,900
India [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total assets	[1]	(810)		(850)
Assets Less Intersegment	[1]	1,100		980
Property and Equipment		180		150
Capital Expenditures		40	0
Corporate [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales		360	420
Operating Profit (Loss)		(1,790)	(1,380)
Depreciation and Amortization Expense		50	40
Interest Expense		10	60
Income Tax Expense (Benefits)		190	320
Total assets	[1]	20,960		22,270
Assets Less Intersegment	[1]	19,020		21,340
Property and Equipment		1,100		$ 1,180
Capital Expenditures		(50)	110
Corporate [Member] | Intersegment Sales [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales		$ 360	$ 420

[1] Negative assets reflect intersegment amounts eliminated in consolidation

XML

Segment Reporting (Details Textual) $ in Millions	Apr. 30, 2018 USD ($)
Segment Reporting Information [Line Items]
Assets Held-for-sale, Not Part of Disposal Group, Total	$ 0.2